Question

EXERCISES
1. The research department of consumer products division has
recommended the marketing department to launch a soap with 3 different
perfumes. The marketing manager has to decide the type of perfume to
launch under the following estimated payoff for various levels of sales.
Type of perfume
Estimated sales (units)
25,000 15.000 10,000
I
200
25
20
II
30
20
10
III
50
30
5
Find the best decision using (i)Maximax , (ii) Maximin,
(iii) Minimax Regret and (iv) Laplace criteria.​

Answer 1

Answer:

department of consumer products division has

recommended the marketing department to launch a soap with 3 different

perfumes. The marketing manager has to decide the type of perfume to

launch under the following estimated payoff for various levels of sales.

Type of perfume

Estimated sales (units)

25,000 15.000 10,000

I

200

25

20

II

30

20

10

III

50

30

5

Find the best decision using (i)Maximax , (ii) Maximin,

(iii) Minimax Regret and (iv) Laplace