17. (Cohan and Associates, 1984) Modern forest management uses controlled fires to reduce fire hazards and to stimulate new forest growth. Management has the option to postpone or plan a burning. In a specific forest tract, if burning is postponed, a general administrative cost of $300 is incurred. If a controlled burning is planned, there is a 50% chance that good weather will prevail and burning will be carried out at a cost of $3200. The results of the burning may be either successful with probability .6 or marginal with probability .4.

Successful execution will result in an estimated benefit of $6000 and marginal execution will provide only $3000 in benefits. If the weather is poor, burning will be cancelled, and the associated planning cost is $1200 with no benefit.

(a) Develop a decision tree to determine whether burning should be planned or postponed.