Answer to Question #66914 in Statistics and Probability for M.A

Question

You are trying to set the selling price to one of your company’s products and there are three prices under consideration. They are sh.4.00, sh. 4.30 and sh. 4.40 per product.

The following information is also available.

Conditions Alternative prices
Sh. 4.00 Shs. 4.30 Shs. 4.40
Best possible 16,000 14,000 12,500
Most likely 14,000 12,500 12,000
Worst possible 10,000 8,000 6,000

Advice the company on the best price to charge using:
i. Maximin method
ii. Minimax regret criterion (12 Marks)