Question $5$

$(10$ marks$)$

Sunlux Investments is about to launch a new product. The demand is uncertain and the price to be charged is also uncertain. The demand may be good, average or poor and the prices can be any of the four prices in the table below. The contribution that can be achieved is also presented in the table:

$\backslash$table$[[\backslash$table$[[$Demand$],[$level$]],$Selling price$],[,N$$$40,N$$$60,N$$$80,N$$$100,],[$Good$,N$$$50000,N$$$60000,N$$$40000,N$$$30000,],[$Average$,N$$$20000,N$$$30000,N$$$30000,N$$$20000,],[$Poor$,N$$$30000,N$$$30000,N$$$20000,N$$$10000,]]$

$\backslash$table$[[$Required$,$Marks,,,,,,,$],[,\backslash$table$[[$Sub$-],[$total$]],$Total,,,,,,,,$],[5\mathrm{.}1,\backslash$table$[[$Decide on the selling price to be chosen if the manager applies the$],[$maximin criterion to make decisions.$]],2,2,,,,,,,],[5\mathrm{.}2,\backslash$table$[[$Decide on the selling price to be chosen If the manager applies the$],[$maximax criterion to make decisions.$]],2,4,,,,,,,],[5\mathrm{.}3,\backslash$table$[[$Decide on the selling price to be chosen if the manager applies the$],[$minimax regret criterion to make decisions.$]],6,10,,,,,,,],[$Total$,]]$