A local TV studio is deciding on a possible new TV show. A successful TV show earns
Question:
A local TV studio is deciding on a possible new TV show. A successful TV show earns the station about $450,000, but if it is not successful, the station loses about $150,000. Of the previous 100 shows reviewed by the local TV station, 25 turned out to be successful TV shows, and 75 turned out to be unsuccessful TV shows. For a cost of $45,000, the local station can hire Buddy's Market Research team; this team will use a live audience in previewing the TV pilots to determine whether the viewed TV show will be successful. Past records show that market research predicts a successful TV show about 90% of the time that the TV show was actually successful and predicts an unsuccessful show 80% of the time that it turned out to be unsuccessful. How should the local TV studio maximize its profits?
Step by Step Answer:
A First Course In Mathematical Modeling
ISBN: 9781285050904
5th Edition
Authors: Frank R. Giordano, William P. Fox, Steven B. Horton