View the step-by-step solution to:

Question

This question was created from Student handout Excercise 7.docx https://www.coursehero.com/file/26202626/Student-handout-Excercise-7docx/

26202626-366557.jpeg
26202626-366557.jpeg

Part 1: Luna, a former cfass mate of Kiana’s, has developed a new product called the rCat Casfle. Luna
advice on how she should evaluate her options. Kiana suggested they develop a payoff table and the
her options. First, they had to determine the Decision Alternatives. States of nature and payoffs. Luna was trying to decide betwee n:
{1} Sell the product to another company and move to the beach,
{2} Hire SBPR to market and distribute the product,
{3} Market the product herself and sell on Amazon. Selling the product directly. she can seli it for $50,000. If she chooses to hire SBPR to market and distribute the product, her payoff will depend on the eco
{or states of nature}. If the economy is "good", then the estimated payoff to Luna is $30,001 "Mo
estimated to have a payoff of 60,000. “Bad" economy is estimated to have a payoff of $35,000 and i
Crisis", it would return nothing to Luna. If she chooses to market the product herself and sell on Amazon, her payoffs are as follows: If there
she estimates a payoff to be $100,000. "Moderate" economy is estimated to have a payoff of $30,
estimated to have a payoff of $40,000 and "Financial Crisis “would cost Luna $15,000. Questions: 1} 1IAI'hat are the decision alternatives? What are the States of Nature? 1IAI'hat are the payoffs?
Build the payoff table on Excel and label these items. 2} 1What’s the best decision based on Maximin?
3} 1IAI'hat’s the best decision based on Maximax?
4} Laplace? 5} Min imaJ-r Regret?

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes