You operate a snow-removal company during each winter, maintaining the driveways and sidewalks of customers in your area. The amount of profit you make in a given year depends mainly on the amount of snowfall in that year. A harsh winter (lots of snow) yields $30,000 profit, a regular winter yields $20,000 profit, and a mild winter (little snow) yields $10,000 profit. For this coming winter, there is a 30% chance for a harsh winter, and a 20% chance for a mild winter.

Actually you have another option this coming winter. The city wants to hire you to assist with the its snow removal and will pay you a fixed amount whatever the severity of the winter. This fixed payment translates into $18,000 profit for the winter. If you accept the city’s offer, however, you will be unable to serve any regular customers.

Setup (but do not fold back!) a decision tree to determine whether you should accept the city’s offer. Be sure to use the correct symbols, to label all items accurately, and to include the terminal values!

Answer rating: 100% (QA)

Decision Tree for Snow Removal Company Start Decision Point Accept city offer Profit 18000 Serve reg... View the full answer