D-Bites is a new burger stall in town. The owners, siblings, Abu and Ali would like to determine the stock burger bread they should keep. Since burger bread would last only 7 days, any unsold burger must be discarded. Burger bread cost 30 cents each. Burger bread sold will yield a profit of RM1 each. D-Bites would like to determine whether they should stock 1200, 1800 or 2400 burgers bread. They believe that the demand for burgers each week could be 1200, 1800 or 2400 burgers with a probability of 0.5, 0.3 and 0.2 respectively.

1a. Calculate the EMV, EOL, and EVPI to determine what is the amount of burger bread should D-Bites stock each week.

D-Bites is also preparing to set up branches of D-Bites burger stalls around Klang Valley. They could set up 50 stalls, 100 stalls or 200 stalls but the profit or loss will depend solely on the demand of the market and the economy of the country, which could be a good market or bad market. D-Bites believes that the chance of a good market or bad market is 50-50. The investments to set up stalls are high and D-Bites could lose a huge amount of investment if the market is bad but would make a substantial profit if the market is good. The payoff table for this investment problem is shown in the table below.

	Good Market	Bad Market
50 stalls	300,000	-100,000
100 stalls	1,000,000	-400,000
200 stalls	2,000,000	-1,500,000

D-Bites would like to be sure that their investment would bring a good return and hence, consider hiring a consultant to conduct a market survey before embarking on setting up branches in Klang Valley. The consultant informed D-Bites that the probability of a positive market research given a good market is 0.8. However, the consultant has also warned D-Bites that there are 0.75 chances of having a negative market research given a bad market. The cost of market research is RM50, 000.

1b. Draw a decision tree to depict the problem faced by D-Bites.

1c. Calculate the revised probability for the information given by the consultant.

1d. Calculate the EMV and determine the best decisions for D-Bites