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 poor-quality grapes, resulting in a percentage of bottles being used as fillers for cheaper table wines, according to the following probability distribution:

The two growers charge different prices for their grapes and, because of differences in taste, the company charges different prices for its wine, depending on which grapes it uses. Following is the annual profit from the wine produced from each grower’s grapes for each percentage defective:

Use decision tree analysis to determine from which grower the company should purchasegrapes.

  • CreatedJuly 17, 2014
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