Question 1
A retailer is deciding how many of a certain product to stock. The historical probability distribution of sales for this product is 0 units, 0.2; 1 unit, 0.3; 2 units, 0.4, and 3 units, 0.1. The product costs $8 per unit and sells for $25 per unit. The largest conditional value (profit) in the entire payoff table for this scenario is
◦ $51 profit.
◦ $17 profit.
◦ $-24 profit.
◦ $75 profit.
◦ $-8 profit.
Question 2
Decision trees
◦ give less accurate solutions than decision tables.
◦ are too complex to be used by decision makers.
◦ are especially powerful when a sequence of decisions must be made.
◦ give more accurate solutions than decision tables.
◦ are rarely used because one needs specialized software to graph them.