You are about to take an important decision. You have two options, either to produce 100 pieces or 50 pieces of your product. At the same time you expect the market price in the comling period ahead 1000 JD (65% probability), but you suspect that the price is 900 JD (20% probability) and perhaps 800 JD (15% probability). What should be the decision if the cost of widget is 875 JD.

You are about to take an important decision. You have two options, either to produce 100 pieces or 50 pieces of your product. At the same time you expect the market price in the comling period ahead 1000 JD (65% probability), but you suspect that the price is 900 JD (20% probability) and perhaps 800 JD (15% probability). What should be the decision if the cost of widget is 875 JD.

Database System Concepts

7th Edition

ISBN:9780078022159

Author:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan

Publisher:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan

Chapter1: Introduction

Section: Chapter Questions

Problem 1PE

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Question

Decision Tree Example
You are about to take an important decision. You have two
options, either to produce 100 pieces or 50 pieces of your
product. At the same time you expect the market price in
the comling period ahead 1000 JD (65% probability), but
you suspect that the price is 900 JD (20% probability) and
perhaps 800 JD (15% probability). What should be the
decision if the cost of widget is 875 JD.

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