Alejandro Chiriboga Prob. 0.

4 Revenue: 5000

Town A

Prob. O.6 Revenue: 8000

Prob. 0.3 Revenue: 3000 Prob. 0.5 Rev: 4000 Prob. 0.2 Rev: 8000 Which market to visit next? Prob. 0.4 Rev: 3000 Town c Prob:0. 5 Rev: 6000 : Prob. 0.1 10000

Town B

Town A: (0.4x5000)+(0.6x 8000)= 6800 Town B: (0.3x3000)+(0.5x4000)+ (0.2x8000)= 4500 Town C: (0.4x3000)+(0.5x6000)+ (0.1x10000)=5200 Town D: (0.3x5000)+(0.3x6000)+( 0.4x9000)= 6900 Best Option: Town D

Town D

Prob:0.3 Rev:5000 Prob:0.3 Rev.: 6000 Prob. 0.4 Rev: 9000

Alejandro Chiriboga

Q3) One of the factors that will impact Joes decision on the decision tree is that probability trees are based on estimates and are inaccurate; they are not 100% reliable. Also, Joe could have not taken all of the options available so there are less options to consider and so he cant know for sure which is the best option. Decision trees do not take in qualitative data, they only take quantitative data, which makes the answer even more unreliable because it odes not take everything in consideration.