A vendor at a local baseball stadium must determine whether to sell ice cream or soft drinks at todays game. The vendor believes that the profit made will depend on the weather. The payoff table (in $) is as follows:

1. What is the expected value of the profits for the following?

Soft Drinks ["200", "175", "180", "120"]

Ice Cream ["200", "175", "180", "120"]

2. What is the best decision from an expected value basis?

it cannot be determined

Sell Ice cream

Sell Soft drinks

Sell both ice cream and Soft drinks

3. What is the expected value of the perfect information?

198

216

24

240

   

Action: Warm weather 200 300 Event Soft Drinks Ice Cream Cool Weather 150 90