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I need answer of b,c,d,e,and f part only. please solve asap 5) Hale's TV Productions is considering producing a pilot for a comedy series in
I need answer of b,c,d,e,and f part only.
please solve asap
5) Hale's TV Productions is considering producing a pilot for a comedy series in the hope of selling it to a major television network. The network may decide to reject the series, but it may also decide to purchase the rights to the series for either one or two years. At this point in time, Hale may either produce the pilot and wait for the network's decision or transfer the rights for the pilot and series to a competitor for $100,000. Hale's decision alternatives and profits (in thousands of dollars) are as follows: Decision Alternative Produce pilot, d, Sell to competitor, de Reject, -100 100 State of Nature 1 Year, 52 50 2 Years, 5 150 100 100 The probabilities for the states of nature are P(51) = 0.25, P(S2) = 0.35, and P(53) = 0.40. For a consulting fee of $5000, an agency will review the plans for the comedy series and indicate the overall chances of a favorable network reaction to the series. Assume that the agency review will result in a favorable (F) or an unfavorable (U) review and that the following probabilities are relevant: P(F) = 0.69 PU (031 Pls, F) - 0,09 P($,F) = 0.26 P($; F) - 0.65 PIS, U) - 0.45 Ps, U) = 0.39 PU) - 0.16 Profit a. Construct a decision tree for this problem. 5, 0.09 6 520.26 50 EV * , = 101.5*0.69 + 100 10:31 lol.s di -100 EV 0.09(-100)+0.26*50 Sess 150 +0.65(150) 101.5 5,0.09 100 EVZ 3 = 101-035 Tolo35 S ovo dz 101.035 F 0.69 20.26 100 = loo 2 100 -0.31 100 di $96035 DO si 0.45 8 -5000 U cost of the consultation 4 dz 576.19 -100 EUq=0.45(-100) 50 S3 150 0.39 (50)+ 0.16 (150) Si 0.45 106 0.19 = -1.5 loo 50.16 Don't 100 Eva E100 5,0.25 lo 120.35 100 di 5 $ 100 000 -100 50 EVO-0.25(-100)+ 150 0.35(50)+0.4 (150) = 52.5 dz Si 0.25 35 loo loo S3 = 100 Ev, - (00 Answer parts b to f b. What is the recommended decision if the agency's opinion is not used? What is the expected value? C. What is the expected value of perfect information? d. What is Hale's optimal decision strategy? e. What is the expected value of the agency's information? f. Is the agency's information worth the $5000 fee? What is the maximum that Hale should be willing to pay for the informationStep by Step Solution
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