The digital television service company TV-más is facing a significant problem of customer loss in recent months, in particular, customers of the Home plan, which consists of an annual subscription whose value is $200 and that allows you to watch more than 40 high definition television channels. The company has prepared a list of clients who have decided that once the subscription has ended, they will not contract the service again, since, among several reasons , they maintain that the company does not treat its clients well. Considering customer opinions, the company has thought of a plan so that customers who have decided not to renew can reverse their decision and subscribe to the service for one more year. The plan consists of giving a gift to customers who have decided not to renew in order to show concern for them. The gift consists of a set of kitchen pots, with the company logo, which costs the company $50. According to information from a pilot plan implemented by the company, it is known that , after receiving the gift, 40% of the people who had decided not to renew, reverse their decision and decide to contract the service again. (a) Create a decision tree that allows the company to decide whether to give the gift to clients who have decided not to renew, considering that they want to maximize the expected utility

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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Decision Under Uncertainty The digital television service company TV-más is facing a significant problem of customer loss in recent months, in particular, customers of the Home plan, which consists of an annual subscription whose value is $200 and that allows you to watch more than 40 high definition television channels. The company has prepared a list of clients who have decided that once the subscription has ended, they will not contract the service again, since, among several reasons , they maintain that the company does not treat its clients well. Considering customer opinions, the company has thought of a plan so that customers who have decided not to renew can reverse their decision and subscribe to the service for one more year. The plan consists of giving a gift to customers who have decided not to renew in order to show concern for them. The gift consists of a set of kitchen pots, with the company logo, which costs the company $50. According to information from a pilot plan implemented by the company, it is known that , after receiving the gift, 40% of the people who had decided not to renew, reverse their decision and decide to contract the service again. (a) Create a decision tree that allows the company to decide whether to give the gift to clients who have decided not to renew, considering that they want to maximize the expected utility

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