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Jerry is planning to buy a vehicle. While he would like to keep his budget low, he also like SUV and hatchback on the other
Jerry is planning to buy a vehicle. While he would like to keep his budget low, he also like SUV and hatchback on the other hand he is interested in sedan car and minivan too, which will help him in his nature of job. Jerry narrowed down his options to the following vehicles: Vehicle Price (s) Warranty (Months) (P) (W) A 54600 60 B 28500 35 32415 48 D 39462 Jerry is risk-neutral with respect to each attribute and his preferences over these attributes satisfy the mutual preferential independence condition. According to him lower price and longer warranty is always preferred (a) If Jerry is willing to pay $150 for an additional increase of one month warranty. Calculate weights Kw and Kp first, then calculate the overall utilities of each vehicle and recommend which vehicle he should select from A, B, C or D. Why? Hint: Use the additive model 75 Jerry is planning to buy a vehicle. While he would like to keep his budget low, he also like SUV and hatchback on the other hand he is interested in sedan car and minivan too, which will help him in his nature of job. Jerry narrowed down his options to the following vehicles: Vehicle Price (s) Warranty (Months) (P) (W) A 54600 60 B 28500 35 32415 48 D 39462 Jerry is risk-neutral with respect to each attribute and his preferences over these attributes satisfy the mutual preferential independence condition. According to him lower price and longer warranty is always preferred (a) If Jerry is willing to pay $150 for an additional increase of one month warranty. Calculate weights Kw and Kp first, then calculate the overall utilities of each vehicle and recommend which vehicle he should select from A, B, C or D. Why? Hint: Use the additive model 75
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