The Advertising Manager for Roadside Restaurants, Inc If She Uses the Maximin Criterion, Which Advertising Strategy Will

question 27

Multiple Choice

The advertising manager for Roadside Restaurants, Inc., needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows: $$\begin{array} { | l | l | l | l|} \hline { \text { Strategy } } & { \text { Cable Network } } \\\hline & \text { Successful } & &\text { Failure } \\ \hline \text { Print } & \$ 10 && 10 \\\hline \text { Mixed } & 4 & &14 \\\hline \text { Television } & 1 && 21 \\\hline\end{array}$$ If she uses the maximin criterion, which advertising strategy will she use?

• A) print
• B) mixed
• C) television
• D) either print or mixed
• E) either mixed or television

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Definitions:

Credit Card Company

A financial institution that issues credit cards, extending credit for consumers to purchase goods and services with the promise of future repayment.

Service Charge

An additional fee charged for services rendered, often seen in the hospitality and banking industries.

Merchandise Sale

The process of selling goods that are purchased for resale, constituting a primary revenue source for retail businesses.

Allowance Method

A method in accounting for managing bad debts by predicting the accounts that cannot be collected at the end of every period.