Brit wants to sell throw blankets for the holiday season at a ...

[cagreen833]

Brit wants to sell throw blankets for the holiday season at a local flea market. Brit purchases the throws for 15, and sells them to his customers for 35 . The rental space is fixed fee of 1500 for the season. Assume there is no leftover value for unsold units. The payoff, if he orders 200 and Demand is 150, is
 a. 800.
  b. 50.
  c. 1050.
  d. 2800.

Question 2

Which of the following is true of decision trees when used to solve a complex problem?
 a. They provide a useful way to decompose the problem.
  b. They are used to compute a decision maker's risk tolerance.
  c. They can be converted into truth tables.
  d. They can be used only when the decision maker is risk neutral.

[Gabe]

Answer to Question 1

c
RATIONALE: An uncertain future event affecting the consequence, or payoff, associated with a decision is known as a chance event.

Answer to Question 2

a
RATIONALE: The first step in solving a complex problem is to decompose the problem into a series of smaller subproblems. Decision trees provide a useful way to decompose a problem and illustrate the sequential nature of the decision process.