Question 2 Tropical Bliss wants to use an event to promote its new products. The company will however need to decide regarding the location and venue to use for the launch of its exiting new product line. They have developed a payoff table for three locations: Montego-Bay, Kingston, and Mandeville, and have also identified three states of nature (the crowd response / turn-out) Large, Moderate and Low: What location should Tropical Bliss choose if the MaxiMax criterion is used? B. What location should Tropical Bliss choose if the LaPlace criterion is used? C. Using the MaxiMin criterion, which location should Tropical Bliss choose?
Question 2
Tropical Bliss wants to use an event to promote its new products. The company will however
need to decide regarding the location and venue to use for the launch of its exiting new product
line. They have developed a payoff table for three locations: Montego-Bay, Kingston, and
Mandeville, and have also identified three states of nature (the crowd response / turn-out) Large,
Moderate and Low:
What location should Tropical Bliss choose if the MaxiMax criterion is used?
B. What location should Tropical Bliss choose if the LaPlace criterion is used?
C. Using the MaxiMin criterion, which location should Tropical Bliss choose?
D. If the probability of getting out a large crowd is 43%, the probability of getting out a moderate size crowd is 22%, and the probability of getting out a small crowd is 35%. Using expected monetary values, what decision should be made by Tropical Bliss and what is that optimal expected value? (
E. Construct the appropriate decision tree to help Tropical Bliss make the appropriate decisions. This tree must be constructed in logical order with labels and net payoffs.
F. Calculate the Expected Value of Perfect Information for the profit.
G. A research company is charging Tropical Bliss $2,000 to get better information for them so they can optimize their earnings from their decision. Should Tropical Bliss hire this research company? Give reason for your answer?
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