1. Can you please describe (in about a paragraph) a situation (preferably but not necessarily in business) that requires a decision necessitating a decision tree with at least two branches, each branch having at least two sub-branches? Can you please explain and justify the structure of the decision tree being used and briefly sketch the decision tree (you can invent the probability and impact numbers in the decision tree)? Then determine the best decision dictated by your decision tree. You must show your calculations and explain how your decision follows from those calculations.
2. Discuss briefly the industries that use Monte Carlo analysis? Explain in about a paragraph why and when Monte Carlo analysis is applicable (and when not)? Can you please highlight one industry and describe in a paragraph a simple situation in that industry in which Monte Carlo analysis could be applicable? Construct a model that captures that situation and run a Monte Carlo simulation on it (using Crystal Ball). Briefly explain how the simulation results would be used?