Two friends of mine, who are PhD in Finance and Marketing, want to write a book...

 

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Two friends of mine, who are PhD in Finance and Marketing, want to write a book with me either on Supply Chain, Marketing or Finance. If we write a Supply Chain book, we have a 35 percent chance of selling copies worth Rs. 650,000 in high demand cities like Islamabad, Lahore, Karachi etc., a chance of making Rs. 400,000 in moderate demand cities like Multan, Peshawar, Rawalpindi etc., and 20 percent chance of making 250,000 is low demand cities like Mianwali, Mardan, Hyderabad etc. If we write a Finance book, we can make 740,000 in high demand cities, 440,000 in moderate demand, and 90,000 low demand. Similarly, if we write a Marketing book, we can make 780,000 in high demand cities, 400,000 in moderate demand, and 100,000 in low demand. If the demand for the supply chain book is low, we can either include chapters of Marketing. Finance or add a reputed co-author from the international academic community in the book. However, we know from past experiences that it won't impact the sales of the book very much, only around 40,000 more in the case of Marketing chapters and 30,000 in the case of Finance chapters. Adding a new co-author can improve the chances of sales by 120,000. Another problem is that we don't know the probabilities of the above improvements as well, so we assign equal possibilities to each chance. In case of low demand for Marketing book, we can either include chapters of Supply Chain, Finance or add a reputed co-author. We only expect a rise of Rs. 15,000 in case of supply chain chapters; 45,000 in case of finance chapters or 115,000 if we include a co-author. The same goes for Finance book, marketing chapters will increase sales by 25,000; supply chain chapters 35,000 whereas co-author will increase sales by 125,000. Again, we don't know the probabilities so assigning equal chances seems logical. One of my friends suggested to perform a market survey before writing books by visiting different cities. This idea seems very promising. I now have the option of conducting a survey (but the cost of survey stands at Rs. 75,000, which will be deducted from the profits of course) which will help me decide which book to write. My expectations are 40 percent unfavorable survey results. Which book should we write? Two friends of mine, who are PhD in Finance and Marketing, want to write a book with me either on Supply Chain, Marketing or Finance. If we write a Supply Chain book, we have a 35 percent chance of selling copies worth Rs. 650,000 in high demand cities like Islamabad, Lahore, Karachi etc., a chance of making Rs. 400,000 in moderate demand cities like Multan, Peshawar, Rawalpindi etc., and 20 percent chance of making 250,000 is low demand cities like Mianwali, Mardan, Hyderabad etc. If we write a Finance book, we can make 740,000 in high demand cities, 440,000 in moderate demand, and 90,000 low demand. Similarly, if we write a Marketing book, we can make 780,000 in high demand cities, 400,000 in moderate demand, and 100,000 in low demand. If the demand for the supply chain book is low, we can either include chapters of Marketing. Finance or add a reputed co-author from the international academic community in the book. However, we know from past experiences that it won't impact the sales of the book very much, only around 40,000 more in the case of Marketing chapters and 30,000 in the case of Finance chapters. Adding a new co-author can improve the chances of sales by 120,000. Another problem is that we don't know the probabilities of the above improvements as well, so we assign equal possibilities to each chance. In case of low demand for Marketing book, we can either include chapters of Supply Chain, Finance or add a reputed co-author. We only expect a rise of Rs. 15,000 in case of supply chain chapters; 45,000 in case of finance chapters or 115,000 if we include a co-author. The same goes for Finance book, marketing chapters will increase sales by 25,000; supply chain chapters 35,000 whereas co-author will increase sales by 125,000. Again, we don't know the probabilities so assigning equal chances seems logical. One of my friends suggested to perform a market survey before writing books by visiting different cities. This idea seems very promising. I now have the option of conducting a survey (but the cost of survey stands at Rs. 75,000, which will be deducted from the profits of course) which will help me decide which book to write. My expectations are 40 percent unfavorable survey results. Which book should we write?

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