or large shop at a new location. Building a small shop will cost the owner P150,000 while building a large plant will cost P250,000. Demand at the new location can be either high or low, which probabilities estimated to be 0.45 and 0.55, respectively. If small shop is built and demand proves to be high, the owner may choose not to expand and earn P335,000 or to expand and earn P445,000. If a small shop is built and the demand turns out to be low, there is no reason to expand and P320,000 will be earned. If a large shop is built and the demand proves to be low, the choices are to do nothing and earn P100,000 or to stimulate demand through an ad campaign and earn P500,000. Creating the ad campaign will cost P200,000. Finally, if a large shop is built and the demand turns out to be high, P700,000 will be earned. REQUIRED: CREATE A DECISION TRE

A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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A store owner must decide whether to build a small or large shop at a new location. Building a small shop will cost the owner P150,000 while building a large plant will cost P250,000. Demand at the new location can be either high or low, which probabilities estimated to be 0.45 and 0.55, respectively. If small shop is built and demand proves to be high, the owner may choose not to expand and earn P335,000 or to expand and earn P445,000. If a small shop is built and the demand turns out to be low, there is no reason to expand and P320,000 will be earned. If a large shop is built and the demand proves to be low, the choices are to do nothing and earn P100,000 or to stimulate demand through an ad campaign and earn P500,000. Creating the ad campaign will cost P200,000. Finally, if a large shop is built and the demand turns out to be high, P700,000 will be earned. REQUIRED: CREATE A DECISION TREE
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