assessments.

for Riesling grapes and $\backslash (\backslash$$ $55,000\backslash )$ if demand is strong for Riesling grapes. If Seneca plants both types of grapes, the annual profit projections are as shown in the following table.

$($a$)$ What is the decision to be made, what is the chance event, and what is the consequence?

The decision to be made is to choose what type of grapes to plant $\backslash (\backslash$checkmark $\backslash ).$ The chance event is demand for the vine $\backslash (\backslash$checkmark $\backslash ).$ The consequence is the expected annual profit contribution $\backslash (\backslash$checkmark $\backslash ).$

Identify the alternatives for the decisions and the possible outcomes for the chance events.

The alternatives for the decisions are Chardonnay, Riesling, and both $\backslash (\backslash$checkmark $\backslash ).$ The possible outcomes for the chance events are $\backslash ((\backslash$mathrm$\{$W$\},\backslash$mathrm$\{$W$\}),(\backslash$mathrm$\{$W$\},\backslash$mathrm$\{$S$\}),(\backslash$mathrm$\{$S$\},\backslash$mathrm$\{$W$\}),(\backslash$mathrm$\{$S$\},\backslash$mathrm$\{$S$\})\backslash$mathrm$\{$V$\}\backslash ).($b$)$ Develop a decision tree. $($Enter monetary values in thousands of dollars and percentages in decimal form.$)$

$($c$)$ Use the expected value approach to recommend which alternative Seneca Hill Winery should follow in order to maximize expected annual profit. $($Enter monetary values in thousands of dollars.$)$

EV$($Plant Chardonnay$)\backslash (\backslash$$ $41\mathrm{.}50\backslash$quad $\backslash )$ thousand

EV$($Plant both grapes$)\backslash (\backslash$$ $12\mathrm{.}40\backslash$quad $\backslash )$ thousand

EV $($Plant Riesling$)\backslash (\backslash$quad $\backslash$$ $19\mathrm{.}75\backslash )$

The best decision is to plant Chardonnay $\backslash (\backslash$mathbf$\{$V$\}\backslash )$ grapes. demand for Riesling is $0\mathrm{.}40.$ How does this change the recommended decision? Assume that the probabilities when Chardonnay demand is weak are still $0\mathrm{.}05$ and $0\mathrm{.}50.($Enter monetary values in thousands of dollars.$)$

EV $($Plant Chardonnay$)\backslash (\backslash$$ $\backslash$square $\backslash )$ thousand

EV$($Plant both grapes$)\backslash$$ thousand

EV$($Plant Riesling$)\backslash$$ thousand

The best decision is to plant Chardonnay $\backslash (\backslash$vee $\backslash )$ grapes. would affect the optimal decision. $($Enter monetary values in thousands of dollars.$)$

EV$($Plant Chardonnay$)\backslash$$ thousand

EV$($Plant both grapes$)\backslash (\backslash$quad $\backslash$$$|\backslash$quad$|\backslash )$ thousand

EV$($Plant Riesling$)\backslash (\backslash$$ $\backslash )$ thousand

The best decision is to plant $---$Select$---\backslash (\backslash$mathbf$\{$V$\}\backslash )$ grapes.