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Decision Analysis

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A car needs to decide whether or not to introduce a new car. Profit of 1 million if sales are around 100 million, a profit of 200,000 if sales a around 50 million, or will it lose 2 million if sales are only around 1 million. If the new car is not on market, it will suffer a loss of 400,000.

A. Construct a payoff table.
B. Construct a regret table.
C. Should they introduce the car if company is 1) conservative, 2) optimistic and 3) or wants to maximize its maximum disappointment?
D. A market research found profit 100 million in sales-1/3; Profit 50 million in sales=1/2; profit 1 million in sales=1/6. Should this company introduce a new car?

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The solution is comprised of detailed calculation and analysis of the various aspects of Decision Analysis in EXCEL.

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