A company is considering advertising its new product on TV on Super Bowl Sunday.
Let d_{1}, d_{2} and d_{3} represent its
decision to purchase one, two or three 30second commercials
respectively.
Dependent on whether the game is S_{1} = “Dull,”
S_{2} =“Average”, S_{3} =“Above average,” or
S_{4} = “Exciting,” their probabilities and profits are as
follows:
S_{1} 
S_{2} 
S_{3} 
S_{4} 

Probability 
0.1 
0.3 
0.4 
0.2 
d_{1} 
5 
12 
10 
8 
d_{2} 
5 
6 
12 
12 
d_{3} 
7 
14 
6 
13 
The expected payoff of the best decision would be:
Select one:
a. 7.6
b. 9.7
c. 12.3
d. 8.3
Multiply probabilities with each alternatives and select the best d with maximum expecetd value
s1  s2  s3  
Probability 
0.1 
0.3 
0.4 
0.2 
d1 
5 
12 
10 
8 
d2 
5 
6 
12 
12 
d3 
7 
14 
6 
13 
For d1,expected pay off is 5*0.1+12*0.3+10*0.4+8*0.2= 9.7
For d2,expected pay off is 5*0.1+6*0.3+12*0.4+12*0.2= 8.5
For d3,expected pay off is 7*0.1+14*0.36*0.4+13*0.2=5.1
expected value is maximum for d1
best decision=d1
and expected payoff =9.7
ANSWER;
The expected payoff of the best decision would be:9.7
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