Hudson Realty is considering a boost in advertising in order to reduce a large i

Question

Hudson Realty is considering a boost in advertising in order to reduce a large inventory of unsold houses. The management plans to make its media decision using the following data on the expected success of newspaper versus pamphlet promotions. Each promotion strategy requires the sane amount of capital: Construct a decision tree value method (x)? and show which promotion alternative you would chose by using the expected Calculate the coefficient of variation (cov) of each alternative, and determine which one should be chosen accordingly? Use the Z-table. and show the likelihood that Alternative! as well as Alternative 2 will yield a net profit between $7000 and $9000.

Explanation / Answer

We have to select either newspaper or pamphlet

Since both have same costs, only profit is the criteria for decision making.

Since mean is more for newspapers depending on expected mean, newspaper is better.

------------------------------------

2)

Since coefficient of variation is the same

we can choose any thing.

---------------------------------------

3)

e1 e2 e3 e1 e2 e3 Net profits 3000 7000 11000 5000 7000 9000 Prob 0.25 0.5 0.25 0.25 0.5 0.25 Profit*prob 750 3500 2750 1250 3500 2250 Mean 2750 2250

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.