Question

1. An insurance company is planning to launch three life insurance policies namely: Standards (s), Preferred (p) and Ultra- Preferred (u). The Manager presents the following information with four scenarios of selling prices and the future profits for each product under the four scenarios:

	Future Profits
	Selling Price	K2	K3	K4	K5
Product :
Standard(S)		1180	1090	960	892
Preferred(P)		1200	1104	918	838
Ultra - Preferred (u)		1320	1152	960	648
Probability		0.2	0.3	0.3	0.2

What would be the managers decisions based on

1. Mamimin criterion selling price of K5
2. Maximax Criterion selling price of k2

Minimax regret criterion

Answer 1

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