Draw a decision tree for problem-set up a payoff table

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Reference no: EM131231838

Diet Coke is contemplating introduction of a new energy drink and a new brand of root beer. We will analysis each decision separately. First we consider analysis of their decision regarding the new energy drink. The company estimates that in case they produce the new energy drink it will yield a profit of $1,000,000 if sales turn out to be around 100,000,000 bottles, a profit of $200,000 if sales turn out to be 50,000,000 bottles, or they will lose $2,000,000 if sales turn out to be around 1,000,000 bottles. If Diet Coke doesn't produce the new energy drinks, they will suffer a loss of $400,000.

1. Draw a decision tree for this problem

2. Set up a payoff table and explain

3. Set up a regret table and explain

Reference no: EM131231838

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