Question: APC is about to launch its new Wings 'N Things fast food nationally.The research depart- ment is convinced that Wings 'N Things will be a
APC is about to launch its new Wings 'N Things fast food nationally.The research depart- ment is convinced that Wings 'N Things will be a great success and wants to introduce it immediately in all AFC outlets without advertising. The marketing department sees "things" differently and wants to unleash an intensive advertising campaign. The adver- tising campaign will cost $100,000 and if successful will produce $950,000 revenue. If the campaign is unsuccessful (there is a 30% chance it won't be), the revenue is estimated at only $200,000. If no advertising is used, the revenue is estimated at $400,000 with proba- bility .8 if customers are receptive and $200,000 with probability .2 if they are not. (a) Draw the associated decision tree. (b) What course of action should AFC follow in launching the new product?
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