PT provides expert quality assurance services on a consultancy basis. The management of the company is unsure whether to price the services it offers at the Deluxe, High, Standard or Low fee level. There is uncertainty regarding the mix of staff that would be available to provide each of the services. As the staff are on different pay scales the mix of staff would affect the variable costs of each service.
The table below details the annual contribution earned from each of the possible outcomes.
Staff mixing mix Fee level
Deluxe High Standard Low
X $135,000 $140,000 $137,500 $120,000
Y $150,000 $160,000 $165,000 $165,000
Z $165,000 $180.000 $192,500 $200,000
If PT applies the minimax regret criterion, the fee level it will choose is
