Nonozi, the marketing manager of SAT Breweries and is deciding which of four potential selling prices...

 

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Nonozi, the marketing manager of SAT Breweries and is deciding which of four potential selling prices to charge for a beer they plan on launching. The alcohol market is a bit uncertain and reaction from competitors may be strong, medium or weak. She has prepared a payoff table showing the forecast profit for each of the possible outcomes. Competitor Reaction Strong Medium Weak R80 R70,000 R50,000 R90,000 R90 R80,000 R60,000 R100,000 Selling Price R100 R70,000 R70,000 R90,000 R110 R75,000 R80,000 R80,000 Using the pay-off table above, identify the selling price that would be chosen if the manager applies the maximin criterion to make the decision. Answer: R Nonozi, the marketing manager of SAT Breweries and is deciding which of four potential selling prices to charge for a beer they plan on launching. The alcohol market is a bit uncertain and reaction from competitors may be strong, medium or weak. She has prepared a payoff table showing the forecast profit for each of the possible outcomes. Competitor Reaction Strong Medium Weak R80 R70,000 R50,000 R90,000 R90 R80,000 R60,000 R100,000 Selling Price R100 R70,000 R70,000 R90,000 R110 R75,000 R80,000 R80,000 Using the pay-off table above, identify the selling price that would be chosen if the manager applies the maximin criterion to make the decision. Answer: R

Answer rating: 100% (QA)

ANS WER R 80 EX PL AN ATION The maxim in criterion is a conservative approach that seeks to maximi... View the full answer