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:
a) If she uses the maximax (minimin) criterion, which advertising strategy will she use?
b) If she uses the maximin (minimax) criterion, which advertising strategy will she use?
c) If she uses the Laplace criterion, which advertising strategy will she use?
d) If she uses the minimax regret criterion, which advertising strategy will she use?
e) If she feels that there is a 60 percent chance that the new cable network will be successful, what is her expected cost (per thousand "hits") for the strategy she will select?
f) If she feels that there is a 60 percent chance that the new cable network will be successful, what is her expected value (per thousand "hits") of perfect information?
g) For what range of probability that the new cable network will be successful will she select the print media strategy?
h) For what range of probability that the new cable network will be successful will she select the television media strategy?