1. Problem 13-16 (Algorithmic)

   The company must first decide whether to undertake the market research study. If the market research study is conducted, the outcome will either be favorable (F) or unfavorable (U). Assume there are only two decision alternatives, d₁ and d₂, and two states of nature, s₁ and s₂. The payoff table showing proft is as follows:

   	State of Nature
   Decision Alternative	S1	S2
   d1	200	200
   d2	300	200

   1. Choose the correct decision tree for this problem.

      (i)	U F d2 d1 d2 d1 d2 d1 d2 d1 d2 d1 d2 d1 s2 s1 s2 s1 s2 s1	(ii)	U F s2 s1 s2 s1 s2 s1 s2 s1 s2 s1 s2 s1 d2 d1 d2 d1 d2 d1
      (iii)	U F s2 s1 s2 s1 s2 s1 s2 s1 s2 s1 s2 s1 d2 d1 d2 d1 d2 d1	(iv)	U F s2 s1 s2 s1 s2 s1 s2 s1 s2 s1 s2 s1 d2 d1 d2 d1 d2 d1

   2. Using the following probabilities, what is the optimal decision strategy?

      P(F) = 0.68	P(s1|F) = 0.36	P(s1|U) = 0.44	P(s1) = 0.60
      P(U) = 0.32	P(s2|F) = 0.64	P(s2|U) = 0.56	P(s2) = 0.40

      Optimal decision strategy: The input in the box below will not be graded, but may be reviewed and considered by your instructor.