Veekay Co. recently developed a new line of computers. Prior to the introduction the management felt that the product had 50% chance of being extremely successful, 30% chance of being successful and 20% chance of failing. If extremely successful the product would generate $12 million in profits over the planning period, if successful $8 million and if it failed the result would be loss of $7 million. If Veekay does not introduce this new line, they will stay with the current product and realize a profit of $5 million based on the company’s projections.
What decision would Veekay make if they used a minimax regret decision rule?
a. not enough information is given
b. introduce the new line
c. stay with the current product
d. they would be indifferent
e. none of the above
