Construct a decision tree based on the payoff table constructed in the previous problem

QA. The Memphis Grizzlies and the Minnesota Timberwolves are two teams in the NBA. Grizzlies and the Timberwolves will play against each other in the first round of NBA playoff games this year, and the first team to win four games out of seven wins the series. According to ESPN’s Basketball Power Index, the Timberwolves have a 51.7% probability of winning each game against the Grizzlies.
Construct a simulation model that to estimate the probability that the Timberwolves would win a best-of-seven series against the Grizzlies. You need 1000 trials and calculate the probabilities and 99% confidence intervals of this winning probabilities. (4 pts)

QB. The Ron Lahody’s Trust Your Butcher Steakhouse in Munice, IN would like to determine the best way to allocate a monthly advertising budget of $1,000 between newspaper advertising and radio advertising. Management decided that at least 25% of the budget must be spent on each type of media and that the amount of money spent on local newspaper advertising must be at least twice the amount spent on radio advertising. A marketing consultant developed an index that measures audience exposure per dollar of advertising on a scale from 0 to 100, with higher values implying greater audience exposure. If the value of the index for local newspaper advertising is 50 and the value of the index for spot radio advertising is 80, how should the restaurant allocate its advertising budget to maximize the value of total audience exposure?(4 pts)

QC. The following payoff table shows the profit for a decision problem with three states of nature and three decision alternatives:

Decision Alternative
State of Nature

s1
s 2
s 3
d 1
7
3
4
d 2
2
4
5
d 3
8
2
3
1. Construct a decision tree based on the payoff table constructed in the previous problem (1 pts).

2. Recommend a decision based on the use of optimistic, conservative, and minimax regret approaches (2 pts)?

3. Suppose P ( s1 ) = 0.1, P ( s2 ) = 0.3, and P ( s3 ) = 0.6. What is the best decision using the expected value approach (1 pts)?

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