If you examine the decision tree in Figure 9.12 (or any other decision trees from PrecisionTree), you

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If you examine the decision tree in Figure 9.12 (or any other decision trees from PrecisionTree), you will see two numbers (in blue font) to the right of each end node. The bottom number is the combined monetary value from following the corresponding path through the tree. The top number is the probability that this path will be followed, given that the best strategy is used. With this in mind, explain (1) how the positive probabilities following the end nodes are calculated, (2) why some of the probabilities following the end nodes are 0, and (3) why the sum of the probabilities following the end nodes is necessarily 1.

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Practical Management Science

ISBN: 1497

5th Edition

Authors: Wayne L. Winston, Christian Albright

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