Home Warehouse is considering marketing one of two new electric mowers for the coming holiday season: XL2000 or the Grass Warrior 3000. XL2000 is a unique mower and appears to have no competition. Estimated profits (in thousands of dollars) under high, medium, and low demand are as follows:

XL 2000

Demand

HighProfit = $3000, Probability = .2

MediumProfit = $800, Probability = .5

LowProfit = $400, Probability = .2

MinimalProfit = $100, Probability = .1

Home Warehouse is optimistic about its Grass Warrior 3000 saw. However, the concern is that profitability will be affected by a competitor's introduction of a electric mower viewed assimilar to Grass Warrior. Estimated profits (in thousands of dollars) with and without competition are as follows:

Grass Warrior

With Competition

High Profit = $800, Probability = .5

MediumProfit = $400, Probability = .2

LowProfit = $200, Probability = .1

MinimalProfit = $100, Probability = .2

Without Competition

High Profit = $1600, Probability = .5

MediumProfit = $800, Probability = .2

LowProfit = $400, Probability = .2

MinimalProfit = $100, Probability = .1

1.Develop a decision tree for the Home Warehouse problem.

2.For planning purposes, Home Warehouse believes there is a 0.7 probability that its competitor will produce a new game similar to Grass Warrior. Given this probability of competition, the director of planning recommends marketing the Grass Warrior saw . Using expected value, what is your recommended decision?

3.List 3 other factors you should advise Home Warehouse to thing about when trying to solve this problem?Think outside the box.Be Creative.