Decision Science Paper

QUESTION 1 50 MARKS Zuess is the Manager of a company intending to introduce three products to market. Due to industry secrecy the products are labelled Mu, Alpha and Lambda. The profitability of each product depends on whether market conditions are favourable, stable or unfavourable as stated in the payoff table below. Zuess has obtained market condition probabilities from the research department at Wonderworld Marketing Consultants Ltd. These probabilities are 20.0% for Favourable market and 40.5% for an unfavourable market. e) Which alternative should zuess choose using the expected monetary value(EMV) criterion? 10 marks f) What is the most Zuess should pay for perfect information? 15 marks