Your firm has developed a new product aimed at the European and Asian markets. For each of these two markets, you
have identified two possible sales scenarios, called "good" and "bad", with the following joint probabilities:
That is, there is a 60% chance the products' sales will be good in Asia and Europe, a 10% chance they will be good in Asia but bad in Europe, and so forth. You have four possible courses of action: • Introduce the product simultaneously in Europe and Asia • Introduce it in Asia first. After it becomes apparent whether sales are good or bad, decide whether to introduce it in Europe, one year later. • Introduce it in Europe first. After it becomes apparent whether sales are good or bad, decide whether to introduce it in Asia, one year later. • Abandon the product.
Use a decision tree to determine the best introduction strategy for the product from the standpoint of EMV. State the optimal policy and its EMV.