La Comida Foods would like to introduce a new line of tropical sauces and marinades. To introduce the new product line, La Comida can either introduce the products first in selected geographic areas to gauge consumer response OR go full- blast and launch the new product line nationally. The cost of introducing the products in selected geographic areas for gauging consumer response is $150K. If the company decides to introduce the product this way, it would need to see the responses to the products before they decide to launch the product line nationally. The probability of a favorable response in the selected geographical areas is estimated at O.60. La Comida can also decide not to go for the launching in the product in selected geographical areas and go ahead with the nationwide launch or not. If La Comida Foods decides to go full-blast in launching the products nationally and are a success, the company estimates that they will gain an annual income of $1.6 million. If the products are not a hit, the company will realize losses to the tune of $7OOK. La Comida estimates the probability of success for the sauces and marinades to be 0.50, if these are introduced without gauging consumer response. If the company decides to introduce in selected geographical areas to gauge consumer response, and the response is favorable, then the probability of a successful nationwide introduction increases to 0.80. If the consumer response during the introduction in the selected geographical areas is unfavorable, then the probability of national success drops to 0.30.
La Comida Foods would like to introduce a new line of tropical sauces and marinades. To introduce the new product line, La Comida can either introduce the products first in selected geographic areas to gauge consumer response OR go full- blast and launch the new product line nationally. The cost of introducing the products in selected geographic areas for gauging consumer response is $150K. If the company decides to introduce the product this way, it would need to see the responses to the products before they decide to launch the product line nationally. The probability of a favorable response in the selected geographical areas is estimated at O.60. La Comida can also decide not to go for the launching in the product in selected geographical areas and go ahead with the nationwide launch or not. If La Comida Foods decides to go full-blast in launching the products nationally and are a success, the company estimates that they will gain an annual income of $1.6 million. If the products are not a hit, the company will realize losses to the tune of $7OOK. La Comida estimates the probability of success for the sauces and marinades to be 0.50, if these are introduced without gauging consumer response. If the company decides to introduce in selected geographical areas to gauge consumer response, and the response is favorable, then the probability of a successful nationwide introduction increases to 0.80. If the consumer response during the introduction in the selected geographical areas is unfavorable, then the probability of national success drops to 0.30.
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Counting Theory
The fundamental counting principle is a rule that is used to count the total number of possible outcomes in a given situation.
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Transcribed Image Text:La Comida Foods would like to introduce a new line of tropical sauces and marinades. To introduce the new product line,
La Comida can either introduce the products first in selected geographic areas to gauge consumer response OR go full-
blast and launch the new product line nationally.
The cost of introducing the products in selected geographic areas for gauging consumer response is $150K. If the
company decides to introduce the product this way, it would need to see the responses to the products before they
decide to launch the product line nationally. The probability of a favorable response in the selected geographical areas is
estimated at O.60.
La Comida can also decide not to go for the launching in the product in selected geographical areas and go ahead with
the nationwide launch or not. If La Comida Foods decides to go full-blast in launching the products nationally and are a
success, the company estimates that they will gain an annual income of $1.6 million. If the products are not a hit, the
company will realize losses to the tune of $7OOK. La Comida estimates the probability of success for the sauces and
marinades to be 0.50, if these are introduced without gauging consumer response.
If the company decides to introduce in selected geographical areas to gauge consumer response, and the response is
favorable, then the probability of a successful nationwide introduction increases to 0.80. If the consumer response
during the introduction in the selected geographical areas is unfavorable, then the probability of national success drops
to 0.30.
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