Answer Happy

Problem 13-16 (Algorithmic)
The company must first decide whether to undertake the marketresearch study. If the market research study is conducted, theoutcome will either be favorable (F) or unfavorable(U). Assume there are only two decisionalternatives, d1 and d2,and two states ofnature, s1 and s2.The payoff table showing proft is as follows:
Problem 13-16 (Algorithmic) The company must first decide whether to undertake the market research study. If the market research study is conducted, the outcome will either be favorable (F) or unfavorable (U). Assume there are only two decision alternatives, di and d2, and two states of nature, 51 and sz. The payoff table showing proft is as follows: (0) a. Choose the correct decision tree for this problem. Market Research Decision Alternative No Market Research F di dz U 51 52 State of Nature S₂ 300 S1 200 400 200 di di R di d di d₂ d di 2 di di Profit (ii) Payoff 200 .300 400 200 .200 300 400 200 200 300 .400 200 Market Research No Market Research F U d d₂ d 2 C 51 51 $2 $1 51 32 51 13 51 52 Profit Payoff 200 400 .300 200 -200 400 .300 200 200 400 .300 200
€ No Market Research Market Research P(F) = 0.60 P(U) = 0.40 F U Optimal decision strategy: P(S1/F) = 0.56 P(S2|F) = 0.44 di d: d: d: d di 51 52 21 52 32 51 6 31 52 Profit (iv) Payoff 200 P($1|U) = 0.48 P($2|U) = 0.52 .300 400 200 .200 300 400 200 200 b. Using the following probabilities, what is the optimal decision strategy? 300 400 200 Market Research P(S1) = 0.30 P(#2) = 0.70 No Market Research U d di d dz 51 51 31 52 51 52 31 52 5 31 32 51 52 Profit Payoff 200 .300 400 200 200 300 400 200 200 .300 400 200