(See Solution) The Shop-Toys Company is going to introduce one of three new products: a doo-dad, a widget and a thing-a-ma-bob. The market conditions (favorable,
Question: The Shop-Toys Company is going to introduce one of three new products: a doo-dad, a widget and a thing-a-ma-bob. The market conditions (favorable, stable, or unfavorable) will determine the profit or loss the company realizes, as shown in the following payoff table:
| Market Conditions | |||
| Favorable | Stable | Unfavorable | |
| Product | .1 | .6 | .3 |
| Doo-dad | $120,000 | $70,000 | $-30,000 |
| Widget | 60,000 | 40,000 | 20,000 |
| Thing-a-ma-bob | 35,000 | 30,000 | 30,000 |
Compute the expected value for each decision and select the best one.
- Develop the opportunity loss table and compute the expected opportunity loss for each product.
- Determine how much the firm would be willing to pay to a market research firm to gain better information about future market conditions (EVPI).
- Construct a decision tree and affirm the best decision.
Deliverable: Word Document 
![[Steps Shown] The Shop-Toys Company in Problem](/images/solutions/MC-solution-library-51915.jpg "[Steps Shown] The Shop-Toys Company in Problem 2 is considering")
[Steps Shown] The Shop-Toys Company in Problem 2 is considering
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