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A food products company is contemplating the introduction of a revolutionary new product with new packaging to replace the existing product at much higher price (Si) or a moderate change in the composition of the existing product with a new packaging at a small increase in price (S2) or a small change in the composition of the existing except the word 'New with a negligible increase in price (S3). The three possible states of nature of events are () high increase in sales (N1), (i) no change in sales (N2) and (iii) decrease in sales (N3). The marketing department of the company worked out the payoffs in terms of yearly net profits for each of the strategies for these events (expected sales). This is represented in the following table: State of nature Payoffs Strategies N2 N3 S, 7,00,000 3,00,000 1,50,000 S2 5,00,000 4,50,000 S3 3,00,000 3,00,000 3,00,000 Which strategy should the executive concerned choose on the basis of (a) Maximin Criterion. (b) Maximax Criterion. (c) Minimax Regret Criterion. (d) Laplace Criterion.

A food products company is contemplating the introduction of a revolutionary new product with new packaging to replace the existing product at much higher price (Si) or a moderate change in the composition of the existing product with a new packaging at a small increase in price (S2) or a small change in the composition of the existing except the word 'New with a negligible increase in price (S3). The three possible states of nature of events are () high increase in sales (N1), (i) no change in sales (N2) and (iii) decrease in sales (N3). The marketing department of the company worked out the payoffs in terms of yearly net profits for each of the strategies for these events (expected sales). This is represented in the following table: State of nature Payoffs Strategies N2 N3 S, 7,00,000 3,00,000 1,50,000 S2 5,00,000 4,50,000 S3 3,00,000 3,00,000 3,00,000 Which strategy should the executive concerned choose on the basis of (a) Maximin Criterion. (b) Maximax Criterion. (c) Minimax Regret Criterion. (d) Laplace Criterion.

MATLAB: An Introduction with Applications
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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A food products company is contemplating the introduction of a revolutionary new product with new packaging to replace the existing product at much higher price (S1) or a moderate change in the composition of the existing product with a new packaging at a small increase in price (S2) or a small change in the composition of the existing except the word 'New'. with a negligible increase in price (S3). The three possible states of nature of events are (1) high increase in sales (N1), (i) no change in sales (N2) and (iii) decrease in sales (N3). The marketing department of the company worked out the payoffs in terms of yearly net profits for each of the strategies for these events (expected sales). This is represented in the following table: State of nature Payoifs Strategies N2 N3 S, 7,00,000 3,00,000 1,50,000 S2 5,00,000 4,50,000 S3 3,00,000 3,00,000 3,00,000 Which strategy should the executive concerned choose on the basis of (a) Maximin Criterion. (b) Maximax Criterion. (c) Minimax Regret Criterion. (d) Laplace Criterion.
Transcribed Image Text:A food products company is contemplating the introduction of a revolutionary new product with new packaging to replace the existing product at much higher price (S1) or a moderate change in the composition of the existing product with a new packaging at a small increase in price (S2) or a small change in the composition of the existing except the word 'New'. with a negligible increase in price (S3). The three possible states of nature of events are (1) high increase in sales (N1), (i) no change in sales (N2) and (iii) decrease in sales (N3). The marketing department of the company worked out the payoffs in terms of yearly net profits for each of the strategies for these events (expected sales). This is represented in the following table: State of nature Payoifs Strategies N2 N3 S, 7,00,000 3,00,000 1,50,000 S2 5,00,000 4,50,000 S3 3,00,000 3,00,000 3,00,000 Which strategy should the executive concerned choose on the basis of (a) Maximin Criterion. (b) Maximax Criterion. (c) Minimax Regret Criterion. (d) Laplace Criterion.
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