The Super Cola Company Must Decide Whether or Not to Introduce

question 37

Essay

The Super Cola Company must decide whether or not to introduce a new diet soft drink. Management feels that if it does introduce the diet soda it will yield a profit of $1 million if sales are around 100 million, a profit of $200,000 if sales are around 50 million, or it will lose $2 million if sales are only around 1 million bottles. If Super Cola does not market the new diet soda, it will suffer a loss of $400,000.
a.
Construct a payoff table for this problem.
b.
Construct a regret table for this problem.
c.
Should Super Cola introduce the soda if the company: (1) is conservative; (2) is optimistic; (3) wants to minimize its maximum disappointment?
d.
An internal marketing research study has found P(100 million in sales) = 1/3; P(50 million in sales) = 1/2; P(1 million in sales) = 1/6. Should Super Cola introduce the new diet soda?
e.
A consulting firm can perform a more thorough study for $275,000. Should management have this study performed?

---

Definitions:

Inappropriately Touches

The act of touching another person without consent, often in a sexual manner that is considered offensive or improper.

Physical Closeness

The proximity and tactile interaction between individuals, often leading to psychological and emotional bonding.

Sexual Predation

The act of engaging in unwanted or aggressive sexual behavior towards others, often exploiting power dynamics or the vulnerability of the victim.

Sexual Response

The series of physical and emotional changes that occur as a person becomes sexually aroused and participates in sexually stimulating activities.