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Company XYZ makes 4 products, A, B , C and D using same material M. Due to the unexpected spread of wild disease in the
Company XYZ makes 4 products, A, B , C and D using same material M. | ||||||||
Due to the unexpected spread of wild disease in the country. There in now | ||||||||
limited supply of the material M and Company XYZ's management have to | ||||||||
decide to make just one of the four products to meet customers' needs in the | ||||||||
short term. Further Information is given Below: | ||||||||
Expected payoffs | ||||||||
Scenarios | Probability | A | B | C | D | |||
1 | 30% | -500,000 | 110,000 | -120,000 | 165,000 | |||
2 | 70% | 130,000 | -34,000 | 150,000 | -300,000 | |||
A consultant can provide further information which will help the company to | ||||||||
decide on the product to make. However, his predictions are 90% certain | ||||||||
at a consultation fees of 90,000 only. Should the company pay the consultation fee | ||||||||
to him? Explain your Answer and show all workings |
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