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QUIZ NO.3 4. Joseph Biggs owns his own ice cream truck and lives 30 miles from a Florida beach resort. The sale of his products is highly dependent on his location and on the weather. At the resort, his profit will be $120 per day in fair weather. $10 per day in bad weather. At home, his profit will be $70 in fair weather and $55 in bad weather. Assume that on any particular day, the weather service suggests a 40% chance of foul weather. a) Construct Joseph's decision tree. b) What decision is recommended by the expected value criterion?

QUIZ NO.3 4. Joseph Biggs owns his own ice cream truck and lives 30 miles from a Florida beach resort. The sale of his products is highly dependent on his location and on the weather. At the resort, his profit will be $120 per day in fair weather. $10 per day in bad weather. At home, his profit will be $70 in fair weather and $55 in bad weather. Assume that on any particular day, the weather service suggests a 40% chance of foul weather. a) Construct Joseph's decision tree. b) What decision is recommended by the expected value criterion?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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QUIZ NO. 3 4. Joseph Biggs owns his own ice cream truck and lives 30 miles from a Florida beach resort. The sale of his products is highly dependent on his location and on the weather. At the resort, his profit will be $120 per day in fair weather, $10 per day in bad weather. At home, his profit will be $70 in fair weather and $55 in bad weather. Assume that on any particular day, the weather service suggests a 40% chance of foul weather. a) Construct Joseph's decision tree. b) What decision is recommended by the expected value criterion?
Transcribed Image Text:QUIZ NO. 3 4. Joseph Biggs owns his own ice cream truck and lives 30 miles from a Florida beach resort. The sale of his products is highly dependent on his location and on the weather. At the resort, his profit will be $120 per day in fair weather, $10 per day in bad weather. At home, his profit will be $70 in fair weather and $55 in bad weather. Assume that on any particular day, the weather service suggests a 40% chance of foul weather. a) Construct Joseph's decision tree. b) What decision is recommended by the expected value criterion?
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