solution

Super Cola: Introduction The next few questions refer to the following information. Super Cola is considering the introduction of a root beer drink. The company feels that the probability that the product will be a success is .6. The payoff table is as follows: Success Failure (si) (s2) 220,000 -340,000 Introduce (d1) Do Not Introduce (d2) 0 0 The company could hire a market research company that, in similar situations in the past, gave one of two types of reports: favorable or unfavorable. You can assume that P(favorablel s1) = .8 and P(favorable | sz) = .3. The company would charge 5,000 for the report. Super Cola: Part 1 Without hiring the market research company: what should Super Cola do if it follows a conservative strategy? Super Cola: Part 2 Without hiring the market research company: what should Super Cola do if it wants to minimize the maximum regret? Super Cola: Part 3 Without hiring the market research company: what should Super Cola do if it wants to maximize expected values? Super Cola: Part 4 What is the maximum amount of money that Super Cola should spend to get more information about the possibility of a successful product introduction?