36. A manager has developed a table that shows payoffs for a future store. The payoffs depend onthe size of the store and the strength of demand (in thousands):Store sizeDemandLowHighSmallLarge1,5002,5005004,000The manager estimates that the probability of low demand is 0.50, and the probability of highdemand is 0.50. The manager could request that a local research firm conduct a survey (cost:100,000) that could better indicate whether demand will be low or high. In discussion with theresearch firm, the manager has learned the following about the reliability of surveys conductedby the firm:Survey showedActual results wasHigh0.30LowLow0.90High0.100.70a. If the manager should decide to use the survey, what would the revised probabilities be fordemand, and what probabilities should be used for survey results?b. Construct a tree diagram for this problemc. Would you recommend that the manager use the survey ?

Decision-making under risk is a probabilistic decision situation in which more than one state of…

Answered: 36. A manager has developed a table…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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