7.21 Developing New Textile Products A textile firm which sells home textile pieces is considering developing a new set of textile products (sheets, bedcovers, towels, etc.) based on a commercial French brand. For this purpose, it must pay the corresponding royalties to use this brand. The Manager of this firm has devised Table 7.5, showing the utilities based on his/ her subjective perceptions. However, the Manager feels reluctant to make this decision. So he/she requests assistance from a market research firm, which implies 500 utilities. By sampling and then analysing the previous results of the consultancy firm, a confidentiality matrix has been drawn up (Table 7.6). (a) Draw the decision tree to help the Manager make a decision. (b) Evaluate the decision tree and indicate the decision to be made. Table 7.5 Utilities according to the managers's perceptions States of nature Many sales Average sales A(0.2) B(0,5) (develop 3000 2000 A2 (do not develop) 0 0 Few sales C(0.3) -6000 0 Table 7.6 Contidentiality matrix What the consultancy firm predicted. Ap What actually occurred in the past A B C 0.8 0.1 0.1 0.1 0.9 0.2 0.1 0.0 0.7 m12