Consider again Carlisle Tire and Rubbers decision problem described in Problem 2. Use the PrecisionTree add-in to

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Consider again Carlisle Tire and Rubber’s decision problem described in Problem 2. Use the PrecisionTree add-in to depict this decision problem as an influence diagram. Then use your influence diagram representation to find the course of action that maximizes this tire manufacturer’s expected profit. Summarize your results.



Problem 2


Carlisle Tire and Rubber, Inc. is considering expanding production to meet potential increases in the demand for one of its tire products. Carlisle’s alternatives are to construct a new plant, expand the existing plant, or do nothing in the short run. The market for this particular tire product may expand, remain stable, or contract. Carlisle’s marketing department estimates the probabilities of these market outcomes as 0.25, 0.35, and 0.40, respectively. Table 7.6 contains Carlisle’s estimated payoff (in dollars) table. image

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Managerial Statistics

ISBN: 9780534389314

1st Edition

Authors: S. Christian Albright, Wayne L. Winston, Christopher Zappe

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