Models M and M are available smartphones to consumers. Each one can be of either good...
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Models M₁ and M₂ are available smartphones to consumers. Each one can be of either good or low quality. There is only one test T₁ that can be used. Ti on M₁ costs R100. On M2, T1 costs R50. The cost of repairing an M₁ if it is of poor quality is R700. If M₂ is of poor quality, the repair costs R740. Test T₁ on M₁ will confirm good quality with a probability of 0.8 and bad quality with a probability of 0.65. Test T₁ on M₂ will confirm good quality with a probability of 0.75 and bad quality with a probability of 0.7. A consumer wants to buy one of the two smartphone models and wants both examined to determine which model is more economic. i. ii. Construct a decision tree for this problem. Which model is more economic? [14] [2] Models M₁ and M₂ are available smartphones to consumers. Each one can be of either good or low quality. There is only one test T₁ that can be used. Ti on M₁ costs R100. On M2, T1 costs R50. The cost of repairing an M₁ if it is of poor quality is R700. If M₂ is of poor quality, the repair costs R740. Test T₁ on M₁ will confirm good quality with a probability of 0.8 and bad quality with a probability of 0.65. Test T₁ on M₂ will confirm good quality with a probability of 0.75 and bad quality with a probability of 0.7. A consumer wants to buy one of the two smartphone models and wants both examined to determine which model is more economic. i. ii. Construct a decision tree for this problem. Which model is more economic? [14] [2]
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A decision tree is a graphical tool that helps to analyze uncertain outcomes and make optimal decisions It consists of nodes and branches that represe... View the full answer
Related Book For
Global Marketing management
ISBN: 978-0470505748
5th edition
Authors: Masaaki Kotabe, Kristiaan Helsen
Posted Date:
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