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You had asked me to ask mu query here.I couldn’t find the answer using search box so writing it here again .new bpp revision kit.page no 25 questn 88 regarding minimax regret ! 4 Column of prices and 3 demand :best possible,most likely,worst possible, same way they have worked out Q.98 too 🙁 Please help
I don’t think the regret table is shown like how you thought us .I dont understand how they derived those values. when I did as per you thought like giving zero where profit is maximum I get a different answer its conflict with answer provided there.I would be glad if you could make it clear.
PRICE $425 | $500 | $600
contribution table:
VARIABLE COST $170 255 | 240.9 | 180.6
$210 215 | 211.7 | 163.8
$260 165 | 175.2 | 142.8Maximax and maximin have been worked out vertically as in What would the price be set if Company BDU used maximax decision? Answer is $425 but minimax regret is worked out horizontally ,Cant regret table be worked out vertically ? as in at price $425 maximum contribution is 255000 and hence zero since nothing we loose then again to the down (255000-215000) am I right?
Q98. IS what price would be set if BDU to use a minimax regret decision ?
It doesn’t matter which way round you set out your rows and columns provided you interpret them properly (and therefore get the same answers).
Here it is the variable cost that is uncertain, and so the regret table is as follows:
Price: 425 500 600
Cost
170. 0. 0 0
210. 40 29.2 16.8
260. 50 65.7 37.8So the maximum regrets are:
selling price $425: 50
selling price $500: 65.7
selling price $600: 37.8The minimum is 50 and therefore selling price of $425 is the correct answer.
isn’t it 255-165 ie;90? in$425 column! how is it 50? max regrets will b in that case $425 :90
and minimum would be 37.8 ie; selling price $600 but revision kit has given $425 as the right answer!Sorry, my previous answer was wrong (I am on vacation and I had jet lag when I replied first 🙁 )
The regret table is a follows:
Price: 425. 500. 600
Var cost:
170. 0. 14.1. 74.6
210. 0. 10.8. 13.2
260. 10.2. 0. 32.4So the maximum regrets are:
For selling price $425: 10.2
For selling price $500: 14.1
For selling price $600: 74.6The minimum of these is 10.2 and therefore the selling price should be $425
I hope that makes sense – sorry about the previous answer 🙁
So what you said in previous answer was fully wrong ?I mean you said that “It doesn’t matter which way round you set out your rows and columns provided you interpret them properly (and therefore get the same answers).”
well it seems that you worked out horizontally like at variable cost 170 maximum profit therefore zero, as we do vertically it gives other answer :/
What I said was that it does not matter which way you set out the rows and columns provided you interpret them properly!
You cannot just learn a rule for preparing the regret table – it is vital you understand what the regrets actually are. How the table is actually shown is irrelevant.
Is it necessary you should go through BPP study material ? I am afraid whether I could finish both text,volume is large 🙁 Will the revision kit be fine? as scheme has changed making it 60% for MCQ and 40% for problems .How to score well for MCQ? I think I lost in MCQ this time ,I am not able to post as a new topic
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