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: If she uses the maximin criterion, which advertising strategy will she use?
A) print
B) mixed
C) television
D) either print or mixed
E) either mixed or television

Question

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:  If she uses the maximin criterion, which advertising strategy will she use?
A) print 
B) mixed 
C) television 
D) either print or mixed 
E) either mixed or television

Quizplus · Accepted Answer

The maximin criterion suggests choosing the option that maximizes the minimum possible outcome. In this case, the minimum outcome is the cost per thousand hits if the new cable television network is not successful. The worst-case scenario for print media is $20 per thousand hits, which is lower than the worst-case scenario for television ($30 per thousand hits). Therefore, the advertising manager should choose to spend the budget on print media to maximize the minimum outcome.

The Advertising Manager for Roadside Restaurants, Inc