Question
SunFarms is a farm that produces different types of crops with 1,000 acres of arable land. The management team has decided to grow one crop
SunFarms is a farm that produces different types of crops with 1,000 acres of arable land. The management team has decided to grow one crop at a time during the whole season in all the arable area. The estimated crop yields and net incomes per bushel under various weather conditions is shown as follows:
Bushes per acre | ||||
Weather | Carrot | Patato | Onion | Garlic |
Dry | 20 | 15 | 30 | 40 |
Moderate | 35 | 20 | 25 | 40 |
Damp | 40 | 30 | 25 | 40 |
Income per bushel | $1 | $1.50 | $1 | $0.50 |
After reviewing the data from the past 50 years, the management team found that 15 of them were considered 'Dry', 25 were considered 'Moderate', and 10 of them were considered 'Damp'. Please do the following: 1. Determine: Decision maker, alternatives, states of nature, prior probabilities, and payoffs of the described situation 2. Apply the four discussed criteria and determine the choice for each of them 3. Construct and solve the decision tree 4. Perform a sensitivity analysis
Hint: for the sensitivity analysis, fix one of the probabilities and modify the other two in changes of 5%; do it for every combination
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started