A product manager at Clean & Brite (C&B) wants to determine whether her company should market a
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Before making her decision regarding this toothpaste product, the manager can spend $75,000 on a market research study. Based on similar studies with past products, C&B believes that the study will predict a successful product; given that product would actually be a success, with probability 0.75. It also believes that the study will predict a failure, given that the product would actually be a failure, with probability 0.65.
a. To maximize expected profit, what strategy should the C&B product manager follow?
b. Calculate and interpret EVSI for this decision problem.
c. Calculate and interpret EVPI for this decision problem.
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Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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