Homework SourseSuper Cola is also considering the introduction of a root be
Super Cola is also considering the introduction of a root beer drink. The company feels that the probability that the product will be a success is .6. The payoff table is as follows:
Success (s1)
Failure (s2)
$250,000
-$300,000
-$ 50,000
-$ 20,000
The company has a choice of two research firms to obtain information for this product. Stanton Marketing has market indicators, I1 and I2 for which P(I1 | s1) = .7 and P(I1 | s2) = .4. New World Marketing has indicators J1 and J2 for which P(J1 | s1) = .6 and P(J1 | s2) = .3. Show or explain how you get your answer to each of the following.
| Success (s1) | Failure (s2) | |
| Produce (d1) | $250,000 | -$300,000 |
| Do Not Produce (d2) | -$ 50,000 | -$ 20,000 |
Solution
