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Unformatted text preview: ue resolution regardless
of the publics response to the report. The CSPC will either issue an unfavorable report recalling
of all products with phthalates, or a more favorable one expressing minimal concern over the
issue. The two reports have equal probability.
If Gerber chooses to be proactive, they can choose to discontinue all products with PVC. In
this case if the report is favorable, there is an 80% chance that the public would react favorably
causing sales to increase by $1 million, but also there is a 20% chance that sales would decline
by $1 million. If the report is negative there is a 25% likelihood that Gerber could preserve
current sales, bu...
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This note was uploaded on 03/18/2014 for the course MGMT 15.053 taught by Professor Jamesorli during the Spring '07 term at MIT.
- Spring '07