A company that is introducing a new product has to choose between four marketing plans, A through D. The marketing plans are forecasted to have varying payoff depending on the level of advertising. The probability of high demand is 0.6 and of low demand 0.4 for expected value. Use the following decision rules to select the marketing plan: maximin, maximax, minimax regret, Laplace, and expected value.
1. Maximin Criterion:
Marketing Plan / Demand
High Demand Payoffs (in $)
P(High Demand) = P (H) = 0.6.
Low Demand Payoffs (in $)
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