A Product Manager at company X, is evaluating alternatives for introducing a new
ID: 3316776 • Letter: A
Question
A Product Manager at company X, is evaluating alternatives for introducing a new package for toothpaste. She has identified four alternative markets, and has constructed the following table which shows X's rewards (in $1,000,000's) for various levels of acceptance by the markets and their probabilities.
Market Acceptance
Market
Low (.3)
Medium (.4)
High (.3)
Northeast Only
-0.7
0
1
Southeast Only
-0.2
0.2
0.8
National
-1.5
-0.2
2
None (don't introduce the new package)
0
0
0
If she uses the EMV criterion, the appropriate choice would be: ________.
a) Northeast Only
b) Southeast Only
c) National
d) None (don't introduce the new package)
Market Acceptance
Market
Low (.3)
Medium (.4)
High (.3)
Northeast Only
-0.7
0
1
Southeast Only
-0.2
0.2
0.8
National
-1.5
-0.2
2
None (don't introduce the new package)
0
0
0
Explanation / Answer
A Product Manager at company X, is evaluating alternatives for introducing a new package for toothpaste. By looking at markets and and market acceptance (Low, Medium and high) values, for Sountheast only market -0.2, 0.2 and 0.8 are market acceptance probabilities is more than any other markets.
So the option b is correct.
If she uses the EMV criterion, the appropriate choice would be: ________.
b) Southeast Only
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