Scenario A Company Must Decide Whether or Not to Change Its

question 24

Short Answer

Scenario
A company must decide whether or not to change its packaging now to a more environmentally safe material.The impact of the decision on profits depends on which future scenario develops.Scenario 1 is that the media does not focus heavily on concerns about packaging and no new laws requiring changes in packaging are passed.Under this scenario,the company will make $30 million if they change their packaging now,but will make $70 million if they do not change their packaging now.Scenario 2 is that the media does focus heavily on concerns about packaging and no new laws requiring changes in packaging are passed.Under this scenario,the company will make $45 million if they change their packaging now,but will make $50 million if they do not change their packaging now.Scenario 3 is that the media does focus heavily on concerns about packaging and new laws requiring changes in packaging are passed.Under this scenario,the company will make $55 million if they change their packaging now,but will make only $10 million if they do not change their packaging now.The probabilities of the three scenarios are 0.3,0.5,and 0.2,respectively.
-What decision will be made to maximize expected payoff?

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Definitions:

MyPlate

A visual tool created by the USDA to guide consumers in making healthier food choices, representing the recommended proportions of food groups on a plate.

DASH Food Plan

Dietary Approaches to Stop Hypertension, a diet rich in fruits, vegetables, low-fat dairy, and reduced in fats and cholesterol.

Behavior Change

The process of transforming or modifying actions, habits, or reactions through various strategies and interventions.

Contracting

In the context of behavior change, creating formal agreements between a client and a professional to achieve specific health objectives.