Construct a decision tree for the following decision situation and indicate the best decision. Fenton and...
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Construct a decision tree for the following decision situation and indicate the best decision. Fenton and Farrah Friendly, husband-and-wife car dealers, are soon going to open a new dealership. They have three offers: from a foreign compact car company, from a U.S. producer of full-sized cars, and from a truck company. The success of each type of dealership will depend on how much gasoline is going to be available during the next few years. The profit from each type of dealership, given the availability of gas, is shown in the following payoff table: Gasoline Availability Dealership Shortage Surplus 0.7 0.3 Compact cars $25,000 $150,000 Full-sized cars -90,000 650,000 Trucks 125,000 170,000 Decision Tree diagram to complete: Shortage 0.7 $250,000 2 $150,00 Compact cars Surplus 0.3 Shortage 0.7 -$90,000 Full-sized cars 1 3 $650,000 Surplus 0.3 Trucks Shortage 0.7 $125,000 4 Surplus 0.3 $170,000 0.7 Shortage 250000 Problem #25 (reference) Compact Cars 250000 Data Results Profit Probability Compact cars Full-sized cars Trucks EMV Shortage 0.7 250000 Surplus 0.3 0.3 Surplus 150000 150000 -90000 650000 150000 125000 180000 0.7 Shortage 90000 Full-sized cars -90000 0.3 Surplus Decision 650000 650000 0.7 Shortage 125000 Trucks 125000 0.3 Surplus 180000 170000 180000 Construct a decision tree for the following decision situation and indicate the best decision. Fenton and Farrah Friendly, husband-and-wife car dealers, are soon going to open a new dealership. They have three offers: from a foreign compact car company, from a U.S. producer of full-sized cars, and from a truck company. The success of each type of dealership will depend on how much gasoline is going to be available during the next few years. The profit from each type of dealership, given the availability of gas, is shown in the following payoff table: Gasoline Availability Dealership Shortage Surplus 0.7 0.3 Compact cars $25,000 $150,000 Full-sized cars -90,000 650,000 Trucks 125,000 170,000 Decision Tree diagram to complete: Shortage 0.7 $250,000 2 $150,00 Compact cars Surplus 0.3 Shortage 0.7 -$90,000 Full-sized cars 1 3 $650,000 Surplus 0.3 Trucks Shortage 0.7 $125,000 4 Surplus 0.3 $170,000 0.7 Shortage 250000 Problem #25 (reference) Compact Cars 250000 Data Results Profit Probability Compact cars Full-sized cars Trucks EMV Shortage 0.7 250000 Surplus 0.3 0.3 Surplus 150000 150000 -90000 650000 150000 125000 180000 0.7 Shortage 90000 Full-sized cars -90000 0.3 Surplus Decision 650000 650000 0.7 Shortage 125000 Trucks 125000 0.3 Surplus 180000 170000 180000
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