# 2. Given the setting at Q1 above (i.e. the 0.6 probability of competition), what is the expected value of Space Pirates (in thousands)? a) 460 b) 640 c) 724 d) 1120 3. Use sensitivity analysis to determine what the probability of competition for Space Pirates would have to be for you to change your recommended decision alternative (p: probability of competition). a) p>0 b) p < 0.7273 c) p>= 0.7273 d) p < 1 (1-3) Consider the following paragraphs to answer Questions 1-3: Video Tech is considering marketing one of two new video games for the coming holiday season: Battle Pacific or Space Pirates. Battle Pacific is a unique game and appears to have no competition. Estimated profits (in thousands of dollars) under high, medium, and low demand are as follows: High \$1000 0.2 Demand Mediunm S700 0.5 Low S300 0.3 Battle Pacific Profit Probability Video Tech is optimistic about its Space Pirates game. However, the concern is that proftability will be affected by a competitor's introduction of a video game viewed as similar to Space Pirates. Estimated profits (in thousands of dollars) with and without competition are as follows Space Pirates with Competition Profit Probability High \$800 0.3 Demand Medium \$400 0.4 Low \$200 0.3 Space Pirates without Competition Profit Probability High \$1600 0.5 Demand Mediumm \$800 0.3 Low \$400 0.2 Q1. Video Tech believes there is a 0.6 probability that its competitor will produce a new game similar to Space Pirates. Given this probability of competition, what is the expected value of Battle Pacific (in thousands)? 460 ● 640 724 1120

2. Given the setting at Q1 above (i.e. the 0.6 probability of competition), what is the expected value of Space Pirates (in thousands)?

a) 460

b) 640

c) 724

d) 1120

3. Use sensitivity analysis to determine what the probability of competition for Space Pirates would have to be for you to change your recommended decision alternative (p: probability of competition).

a) p>0

b) p < 0.7273 c) p>= 0.7273

d) p < 1 (1-3) Consider the following paragraphs to answer Questions 1-3: Video Tech is considering marketing one of

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