DECISION TREE TUTORIAL QUESTIONSQUESTION 1An events management company is trying to decide whether or not to advertise an outdoor concert.The sale of tickets is dependent on the weather. If the weather is poor it is expected that 5 000 ticketswill be sold without advertising. There is a 70% chance that the weather will be poor. If the weather isgood it is expected that 10 000 tickets will be sold without advertising. There is a 30% chance that theweather will be good.If the concert is advertised and the weather is poor, there is a 60% chance that the advertising willstimulate further demand and ticket sales will increase to 7 000. If the weather is good there is a 25%chance the advertising will stimulate demand and ticket sales will increase to 13 000.The profit expected, before deducting the cost of advertising, at different levels of ticket sales are asfollows: The cost of advertising the concert will be N$15 000.Number of tickets soldProfitN$(20 000)(5 000)35 00055 00070 00090 000115 000130 0005 0006 0007 00080009 00010 00011 00012 00013 000150 000Required:Demonstrate, using a decision tree, whether the concert should be advertised or not.

Decision analysis is a part of business operations where the organization has to take a decision…

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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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