1.A passenger bus service operator is considering entering into maintenance contract for a new bus which would cost him

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answerhappygod
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1.A passenger bus service operator is considering entering into maintenance contract for a new bus which would cost him

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1.A passenger bus service operator is considering entering into
maintenance contract for a new bus which would cost him K2 500.
With the contract in place there is a probability of 0.10 of a
breakdown over the contract period, but without it the probability
is 0.30. If he can avoid a breakdown his profit will be K20 000 but
this will drop to K10 000 in the event of such a breakdown. Should
he enter into the maintenance contract?
2.A manufacturer has K100 000 to make either lightweight or
heavy jackets for winter wear. The winter may be mild or severe. If
lightweight jackets are made and the winter is mild, the payoff
will be K105 000 and if heavy jackets are produced, the payoffs for
mild and severe winters are K110 000 and K125 000, respectively.
Past records show that 70% of the winters were mild and 30% were
severe.
Design a decision tree for this problem.
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