A company that manufactures designer jeans is contemplating whether to increase its advertising budget by $1 million for next year.If the expanded advertising campaign is successful,the company expects sales to increase by $1.6 million next year.If the advertising campaign fails,the company expects sales to increase by only $400,000 next year.If the advertising budget is not increased,the company expects sales to increase by $200,000.Identify the payoff in this decision-making problem.
A)Four consequences resulting from the Increase/Do Not Increase and Successful/Not Successful combinations.
B)Two possibilities: (1)campaign is successful and (2)campaign is not successful.
C)Two choices: (1)increase the budget and (2)do not increase the budget.
D)The increase in sales dollars next year.

Question

Quizplus · Accepted Answer

The payoff in this decision-making problem is the increase in sales dollars next year, which is the result of the decision to increase or not increase the advertising budget and the success or failure of the campaign.

A Company That Manufactures Designer Jeans Is Contemplating Whether to Increase