Instructions

Answer ALL questions

Marks allocated for each question is indicated at the end of the question

Show all your workings

Question One

Breeze Ltd is trying to set the selling price for one of its products and three prices are under

consideration. These are sh$.40,$ sh$.45,$ and sh$.50.$ The following inform is also provided:

Fixed costs sh$.150,000$

Variable cost per unit sh$.25$

Required:

Advice the company on the best possible price to set based on the decision methods

under uncertainty. Instructions

Arswer AL I questions

Marks allocated for eachquestion is indicated at the end of the question:

Show allyour workings

Question One

Breeze Itd is trying to set the selling price for one of its prodncts and thee prices are nuder

consideration These are sh $40.$ sh$.45,$ and sh$.50.$ The following inform $15$ also provided:

Fixed costs sh$.150,000$

Variable cost per unit sh$.25$

Required:

Advice the company on the best possible price to set based on the decision methods

iinder uncertainty.

i$)$ Maxi max

$(3$ marks$)$

ii$)$ Maxi min

$(3$ marks$)$

iiii$)$ Laplace

$(3$ marks$)$

IV$)$ Minimax regret

$(3$ marks$)$

v$)$ Hurwitz Criteria $($Degree of opfimism can he assumed to be:$990)$

$(3$ marks$)$