# Question: The Miramar Company in Problem 18 is considering contracting with

The Miramar Company in Problem 18 is considering contracting with a market research firm to do a survey to determine future market conditions. The results of the survey will indicate either positive or negative market conditions. There is a .60 probability of a positive report, given favorable conditions; a .30 probability of a positive report, given stable conditions; and a .10 probability of a positive report, given unfavorable conditions. There is a .90 probability of a negative report, given unfavorable conditions; a .70 probability, given stable conditions; and a .40 probability, given favorable conditions. Using decision tree analysis and posterior probability tables, determine the decision strategy the company should follow, the expected value of the strategy, and the maximum amount the company should pay the market research firm for the survey results.

## Relevant Questions

The Friendlys in Problem 25 are considering hiring a petroleum analyst to determine the future availability of gasoline. The analyst will report that either a shortage or a surplus will occur. The probability that the ...The Valley Wine Company purchases grapes from one of two nearby growers each season to produce a particular red wine. It purchases enough grapes to produce 3,000 bottles of the wine. Each grower supplies a certain portion of ...The Place-Plus real estate development firm in Problem 24 is dissatisfied with the economistâ€™s estimate of the probabilities of future interest rate movement, so it is considering having a financial consulting firm provide ...Why do waiting lines form at a service facility even though there may be more than enough service capacity to meet normal demand in the long run? All trucks traveling on Interstate 40 between Albuquerque and Amarillo are required to stop at a weigh station. Trucks arrive at the weigh station at a rate of 200 per 8-hour day, and the station can weigh, on the average, ...Post your question