Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I am going to fly to San Francisco on December 8 th and return home on December 11 th .My travel agent tells me that

I am going to fly to San Francisco on December 8th and return home on December 11th.My travel agent tells me that I could buy a one-way ticket today for $350 or a round-trip ticket for $660.If I wait until December 1st to buy, a one-way ticket will cost $370 and a round-trip ticket will cost $730.It is possible that before December 1st, my aunt (who works for the airline) will be able to obtain a free one-way ticket for me back home. If she cannot get the ticket for free, the one-way ticket will cost $370.The probability that my aunt will obtain the free ticket is 0.3.If I bought a round-trip ticket today and my aunt has obtained a free ticket, I may return "half" of my round-trip to the airline.In this case, my total cost will be $330 plus a $50 penalty.

a) Draw a decision tree for this problem.

b) Use the tree from part a) to determine my best course of action.What should I do, and when?What is the expected cost of my obtaining round-trip transportation to San Francisco?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Strategic Management Awareness And Change

Authors: Frank Martin , John Thompson , Jonathan M.Scott

8th Edition

1473726336, 978-1473726338

More Books

Students also viewed these General Management questions