The Sports Warehouse operates in the sportswear industry and has a cricket division recently launched. The company is unsure of the turnout of the division and has to decide which one of the following three products to buy and sell: 1. Cricket bats If the division decides to sell cricket bats, there is a 35% chance that the division's profit for 2020 will be N$500 000 and a 50% chance that the profit will be N$200 000. The only other possibility is a loss of N$100 000. 2. Cricket balls If this option is chosen, cricket balls will be imported and then sold locally. If the division decides to sell cricket balls, there is a 10% chance that customers will not like the product and this will result in a loss of N$140 000. However, if customers like the product, the following possibilities could apply in the market for 2020:

Probability	Conditional profit for Sports Warehouse
Exchange rate improves Exchange rate remains constant Exchange rate deteriorates	30% N$180 000 25% N$150 000 45% N$120 000

3. Wicket sets This option will render a certain amount of profit of N$170 000 based on a special order that was received.

REQUIRED	Marks
1.1.	Draw a decision tree for Sports Warehouse and recommend which product the cricket division should buy and sell purely based on financial grounds. Show all your calculations.	25
1.2	The management of Sports Warehouse are confused about the two terms, risk and uncertainty. Explain to them the difference between risk and uncertainty. List and explain any three techniques that can be used to deal with uncertainty.	6
Total	31