Question Value: 20 St. John's Brewery (SJB) is getting ready for a busy tourist season. SJB wants to either increase production or produce the same amount as last year, depending on the demand level for the coming season. SJB estimates the probabilities for high, medium and low demands as 0.33,0.27, and 0.4 respectively, on the basis of the number of tourists forecasted by the local recreational bureau. If SJB increases production, the expected profits corresponding to high, medium and low demands are $650,000,$250,000 and $100,000 respectively. If SJB does not increase production, the expected profits are $450,000, $400,000 and $200,000 respectively. (NOTE: Text answers are case sensitive and the value of different parts of this question is indicated in square brackets [/]) Construct a decision tree for SJB. On the basis of the EV, what should SJB do? What is the expected value of increasing production? [5/20] What is the expected value of not increasing production? [5/20] Should SJB increase production (enter either 'Yes' or 'No') Q. [10/20] (Please note that you may retry this assignment up to 5 times. You will have to click "Submit Assignment" after each attempt of the entire assignment and immediately after you do you will be able to view some Assignment Feedback (often including question solutions) using the 'View Details' button in the bottom right of the screen. The grade of your best attempt for the entire assignment is the one that will be recorded for this assignment.) Question Value: 20 St. John's Brewery (SJB) is getting ready for a busy tourist season. SJB wants to either increase production or produce the same amount as last year, depending on the demand level for the coming season. SJB estimates the probabilities for high, medium and low demands as 0.33,0.27, and 0.4 respectively, on the basis of the number of tourists forecasted by the local recreational bureau. If SJB increases production, the expected profits corresponding to high, medium and low demands are $650,000,$250,000 and $100,000 respectively. If SJB does not increase production, the expected profits are $450,000, $400,000 and $200,000 respectively. (NOTE: Text answers are case sensitive and the value of different parts of this question is indicated in square brackets [/]) Construct a decision tree for SJB. On the basis of the EV, what should SJB do? What is the expected value of increasing production? [5/20] What is the expected value of not increasing production? [5/20] Should SJB increase production (enter either 'Yes' or 'No') Q. [10/20] (Please note that you may retry this assignment up to 5 times. You will have to click "Submit Assignment" after each attempt of the entire assignment and immediately after you do you will be able to view some Assignment Feedback (often including question solutions) using the 'View Details' button in the bottom right of the screen. The grade of your best attempt for the entire assignment is the one that will be recorded for this assignment.)
