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The product manager for Antiques Plus wants to decide which of two advertising campaigns to adopt in marketing the services of his company, which specializes
The product manager for Antiques Plus wants to decide which of two advertising campaigns to adopt in marketing the services of his company, which specializes in the sale of antiques purchased in estate sales. He has assessed three levels of customer volume for each campaign: minor, modest, and all out. The problem is to decide which advertising campaign to choose, based on estimated operating income associated with the two campaigns for each level of potential customer volume. The payoffs in operating income and the probabilities for the three levels are as follows: Level of Increase Minor Modest All out Operating Income for Advertising Campaign B $ 80,000 Probability 0.2 A $ 100,000 0.5 $ 0.3 400,000 $1,600,000 $ 300,000 $1,800,000 Required: 1. This part of the question is not part of your Connect assignment. 2-a. Calculate the expected profits for the two advertising campaigns. (Enter your answers in thousands of dollars.) Campaign A Campaign B Expected Profits 2-b. Which campaign should the advertising manager choose? Campaign A Campaign B
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