Newfoundland and Labrador is busy designing new lottery scratch-off games. In the latest game, Bayside Boondoggle, the
Question:
Newfoundland and Labrador is busy designing new lottery scratch-off games. In the latest game, Bayside Boondoggle, the player is instructed to scratch off one spot: A, B, or C. A can reveal “Loser,” “Win $1,” or “Win $50”. B can reveal “Loser” or “Take a Second Chance”. C can reveal “Loser” or “Win $500”. On the second chance, the player is instructed to scratch off D or E. D can reveal “Loser” or “Win $1”. E can reveal “Loser” or “Win $10”. The probabilities at A are 0.9, 0.09, and 0.01. The probabilities at B are 0.8 and 0.2. The probabilities at C are 0.999 and 0.001. The probabilities at D are 0.5 and 0.5. Finally, the probabilities at E are 0.95 and 0.05. Draw the decision tree that represents this scenario. Use proper symbols and label all branches clearly. Calculate the expected value of this game
Operations Management
ISBN: 978-0132687584
1st Canadian Edition
Authors: Jay Heizer, Barry Render, Paul Griffin