AutoSave . Off Exercise 9_ Decision-making Using Probability (2) (1) - Saved to this PC . Search A Anisa AL Nabhani (20201056) AA X File Home Insert Design Layout References Mailings Review View Help Shape Format Share Comments & Cut Calibri (Body) * 11 ~ A" A Aa Ap Find AaBbCCD AaBbCcDd Paste [ Copy AaBbCcDd AaBbCcDd AaBbC( AaBbCct AaB Gc Replace BIU~ ab X x A LA 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Dictate Sensitivity Format Painter Select Clipboard Font Paragraph Styles Editing Voice Sensitivity Example 5 (Homework) : Charlotte Watson, the manager of a small sales company, has the opportunity to buy a fixed quantity of a new type of Android tablet computer which she can then offer for sale to clients. The decision to buy the product and offer it for sale would involve a fixed cost of f200,000. The number of tablets that will be sold is uncertain, but Charlotte's prior beliefs are expressed as follows. . Sales will be "poor" with probability 0.2; this will result in an income of f100,000. . Sales will be "moderate" with probability 0.5; this will result in an income of (220,000. . Sales will be "good" with probability 0.3; this will result in an income of $350,000. For an additional fixed cost of $30,000, market research can be conducted to aid the decision- making process. The outcome of the market research can be either positive or negative, with probabilities 0.58 and 0.42, respectively. Knowing the outcome of the market research changes the probabilities for the main sales project as follows: Main sales probabilities Market research Poor Moderate Good Positive 0.15 0.45 0.4 Negative 0.6 0.35 0.05 If Charlotte would make decisions based on expected monetary value, (a) Draw a decision tree for this problem. (b) Use the expected monetary value to determine the optimal course of action for her and write the final conclusion/implication. Page 4 of 4 1002 words DX English (United States) " Focus -+ 100% 10:29 Type here to search ^ O ( 1) ENG 12/30/2021