Which salary plan should jim select

Reference no: EM13180055

Jim has been employed at Gold Key Realty at a salary of $2000 per month during the past year. Because Jim is considered to be a top salesman, the manager of Gold Key is offering him one of three salary plans for the next year: (1) a 25% rate to $2500 per month; (2) a base salary of past salary of $1000 plus $600 per house sold; or, (3)a straight commission of $1000 per house sold. Over the past year, Jim sold up to 6 homes in a month. a. compute the monthly salary payoff table for Jim, b. For this payoff table find Jim's optimal decision using: (1) the conservative approach, (2) minimax regret approach. c. Suppose that during the past year the following is Jim's distribution of home sales. If one assumes that this a typical distribution for Jim's monthly sales, which salary plan should Jim select?

Reference no: EM13180055

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