1. A company is contemplating the introduction of a new product with new packing to replace the existing product at much higher Price (P) or a moderate change in the composition of the existing product with a new packaging at a small increase in price (P) or a small change in the composition of the existing product except the word "new" with a very small increase in price (P3). The three possible states of nature are (i) high increase in sales (n), (ii) no change in sales (n), and (iii) decrease in sales (n3). The marketing department of the company calculated the payoffs in terms of yearly net profits from each of the strategies (expected sales). This is represented in the following table: Strategies States of Nature 3000 4500 3000 P1 7000 5000 1500 P3 3000 3000 Which strategy should the concerned executive choose on the basis of: (i) Maximin criterion, (ii) Laplace criterion ?
1. A company is contemplating the introduction of a new product with new packing to replace the existing product at much higher Price (P) or a moderate change in the composition of the existing product with a new packaging at a small increase in price (P) or a small change in the composition of the existing product except the word "new" with a very small increase in price (P3). The three possible states of nature are (i) high increase in sales (n), (ii) no change in sales (n), and (iii) decrease in sales (n3). The marketing department of the company calculated the payoffs in terms of yearly net profits from each of the strategies (expected sales). This is represented in the following table: Strategies States of Nature 3000 4500 3000 P1 7000 5000 1500 P3 3000 3000 Which strategy should the concerned executive choose on the basis of: (i) Maximin criterion, (ii) Laplace criterion ?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:1. A company is contemplating the introduction of a new product with new packing to
replace the existing product at much higher Price (P) or a moderate change in the composition of the
existing product with a new packaging at a small increase in price (P2) or a small change in the
composition of the existing product except the word "new" with a very small increase in price (P3). The
three possible states of nature are : (i) high increase in sales (n), (ii) no change in sales (n), and
(iii) decrease in sales (na). The marketing department of the company calculated the payoffs in terms of
yearly net profits from each of the strategies (expected sales). This is represented in the following table :
Strategies
States of Nature
3000
1500
PI
P2
P3
7000
5000
3000
4500
3000
3000
Which strategy should the concerned executive choose on the basis of:
(i) Maximin criterion,
(ii) Laplace criterion ?
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