Determine the optimal strategy for vitamix

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Reference no: EM132090115

Vitamix is developing a new high-end juicer. Vitamix has to determine whether they want to market the product. If they choose to market the product and it is successful, the they will earn a profit of $50,000 whereas an unsuccessful product will result in a loss of $35,000. In the past, similar products have been successful 60% of the time. A marketing study can be conducted for $5000 at a few of the stores in North Carolina to determine the effectiveness of the new product. If the result of the marketing study is favorable, there is an 80% chance that the product will be successful. If the result is unfavorable, there is only a 30% chance that the product will be successful. There is a 60% chance of a favorable test result and a 40% chance of an unfavorable test result. Determine the optimal strategy for Vitamix. Also find EVSI and EVPI.

Reference no: EM132090115

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