MGM 721: Seminar in Decision Theory

Case Study Link:

https://www.coursehero.com/u/file/141333708/MGM721-Fall-2021-Final-Exam-14th-aprilpdf/

When individuals need to make a decision, they often face alternatives and some uncertainty. Identifying alternatives and anticipating outcomes in a systematic way provides value in better decision-making. Decision trees help to clarify the choices, risks, monetary gains, and other information involved in the decision. As a result, managers can make an informed decision when choosing the alternative that provides the best net gain and whether the net gain is worthwhile to pursue.

This case presents a scenario in which the sport marketing manager of the local sports commission is working with the convention center to bring a sporting event to the city in order to enhance the city's image and generate positive economic impact. The manager is faced with evaluating the alternatives and making a recommendation to the sports commission and convention center executives on which event to pursue.

You have two tasks

Task A -

1. Construct a decision tree as the sport marketing manager of the local sports commission and convention and visitors bureau (CVB) for Jeffersonville clearly showing all values (expected values and net profit (gain) for each considered alternative.
2. What is your recommendation to the executives?

Task B -

1. You now learn that the new probability for a successful bid for Event A is 0.3
2. Construct a new decision tree that incorporates this new information.
3. Based on this information, how will your recommendatin to the executives change?

Important :

• Task A and B should be on answer Separately
• All values (expected and gain (profit) should be clearly shown Separately