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The manufacturing company, a corporate raider, has acquired a shoe company and is contemplating the future of one of its major plants located in Sta. Rosa, Laguna. Three alternative decisions are being considered: 1) expand the plant and produce lightweight durable shoes for possible sales to the department store, a market with little foreign competition; 2) maintain the status quo at the plant, continuing production of shoes that are subject to heavy foreign competition, or 3) sell the plant now. If one of the first two alternatives is chosen, the plant will still be sold at the end of the year. The amount of profit that could be earned by selling the plant in a year depends on foreign market conditions, including the status of a trade embargo bill in congress. The following payoff table describes this decision situation.
Sagot :
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