The Problem in Words
Your company is about to introduce a new vacuum cleaner. You have conducted customer surveys, and you determined the relative preferences for the following warranty/price product configurations (9 being the most preferred):
|
$129 |
$99 |
$79 |
2 Years |
7 |
8 |
9 |
1 Year |
3 |
4 |
6 |
None |
1 |
2 |
5 |
In order to derive an optimal product configuration, you need to know the utility functions for warranty length and price implied by the preferences in the table above.