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Class activity :Decision tree problem

A company has four merchandising plan each focusing on a popular name brand. Each plan
yields a daily net profit as noted in the table.

Profit because of ski condition ( in Dollar)


Brand focus 1 (Low-snow) 2 3 4 (Highly-snowy)
Patagonia 40 92 20 48
North Face 50 84 10 52
Cloud Veil 35 80 40 64
Columbia 45 72 10 60
Probabilities 0.20 0.25 0.30 0.25

Question:

1. Develop decision tree


2. Calculate the expected monetary value (EMV) under risk.
3. Calculate the expected value with perfect information (EVwPI).
4. Calculate the expected value of perfect information (EVPI).

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