Happy Company is going to introduce one of the three new products (alternative) to the market: A, B and C or Do Nothing. Each of the market conditions (favourable, stable or unfavourable) affects the payoff of the products. The company estimates the following payoffs and probabilities: Decision Table with Conditional Values for Happy Company: Market Condition and Payoff (RM) Product Favourable Stable Unfavourable A B 8,000 5,000 7,000 6,000 -5,000 3,000 -1,200 -1,000 6,000 Do Nothing Probability 0.4 0.3 0.3
Happy Company is going to introduce one of the three new products (alternative) to the market: A, B and C or Do Nothing. Each of the market conditions (favourable, stable or unfavourable) affects the payoff of the products. The company estimates the following payoffs and probabilities: Decision Table with Conditional Values for Happy Company: Market Condition and Payoff (RM) Product Favourable Stable Unfavourable A B 8,000 5,000 7,000 6,000 -5,000 3,000 -1,200 -1,000 6,000 Do Nothing Probability 0.4 0.3 0.3
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A)decision table with probability for decision under risk
B)Best decision under emv method
Transcribed Image Text:Happy Company is going to introduce one of the three new products (alternative) to the market:
A, B and C or Do Nothing. Each of the market conditions (favourable, stable or unfavourable)
affects the payoff of the products. The company estimates the following payoffs and
probabilities:
Decision Table with Conditional Values for Happy Company:
Market Condition and Payoff (RM)
Product
Favourable
Stable
Unfavourable
8,000
-5,000
-1,200
-1,000
A
6,000
3,000
5,000
7,000
6,000
Do Nothing
Probability
0.4
0.3
0.3
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