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The alternatives 1 and 2 in the following payoff table representthe two possible manufacturing strategies that the EKAmanufacturing company can adopt. The level of demand affects thesuccess of both strategies. The states of nature (Si) represent thelevels of demand for the company products. S1, S2 and S3characterize high, medium, and low demand respectively. The payoffvalues are in thousands of dollars. States of nature s1 s2 s3Alternative (strategy) 1 10 40 70 Alternative (strategy) 2 60 12050 Given that the states of nature (S1) represent the levels ofdemand for the company products. S1, S2 and S3 characterize high,medium and low demand with probabilities of .2, .55 and .25respectively.
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