Question: Deborah Kellogg buys Breathalyzer test sets for the Denver Polic

Deborah Kellogg buys Breathalyzer test sets for the Denver Police Department. The quality of the test sets from her two suppliers is indicated in the following table:


For example, the probability of getting a batch of tests that are 1% defective from Loomba Technology is .70. Because Kellogg orders 10,000 tests per order, this would mean that there is a .7 probability of getting 100 defective tests out of the 10,000 tests if Loomba Technology is used to fill the order. A defective Breathalyzer test set can be repaired for $0.50. Although the quality of the test sets of the second supplier, Stewart-Douglas Enterprises, is lower, it will sell an order of 10,000 test sets for $37 less than Loomba.
(a) Develop a decision tree.
(b) Which supplier should Kellogguse?
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  • CreatedJuly 23, 2013
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