decision tree analysis, Managerial Economics

Assignment Help:
I. A farmer – businessman is in a quandary as to what crop to plant in his land. He has the option to plant Crop A, Crop B, or Crop C. f the weather turns out to be good and the plants Crop A, he expects to realize P 300,000; if he plants Crop B, he expects P 260,000; and if he plants Crop C, P 160,000. If the weather turns out to be normal, and he plants Crop A, he stands to realize P 180,000; if he plants Crop B, P 200,000; and if Crop C, P 100,000. On the other hand, if the weather turns out to be bad, and he plants Crop A, he stands to lose P 40,000; if Crop B, P 20,000; and if Crop C, P 10,000. The farmer inquired from the PAGASA who informed him that the probability of a good weather is 20%; normal weather, 60%; and bad weather 20%.

Base on above information which crop should the farmer-businessman plant? Do a Decision Tree analysis showing the different expected value of the various options.

Related Discussions:- decision tree analysis

Stock market investors, A hypothetical AD-AS model for Canada Durin...

A hypothetical AD-AS model for Canada During the 1990s, many stock market investors in Canada became optimistic about information technology and bid up stock prices, more t

Methods of demand forecast which rely on quantitative data, Methods which r...

Methods which rely on quantitative data: Rule-based forecasting Data mining Quantitative analogies Discrete event simulation Neural networks Extrapo

Phillips curve, PHILLIPS CURVE   The Phillips  curve,  named  after  A....

PHILLIPS CURVE   The Phillips  curve,  named  after  A.  W.  Phillips,  describes  the  relationship between unemployment  and  inflation. In  1958  Phillips, then  professor a

The firm, The Firm The unit that uses factors of production to produce...

The Firm The unit that uses factors of production to produce commodities then it sells either to other firms, to household, or to central authorities. The firm is thus the uni

Explain about isoquant map, Q. Explain about Isoquant Map? We can label...

Q. Explain about Isoquant Map? We can label isoquants in physical units of output without any difficulty. Because every isoquant signifies a specified level of output it's poss

What are terms included in oligopoly, What are terms included in oligopoly?...

What are terms included in oligopoly? Oligopoly includes: • The meaning of oligopoly, and why it arises • Collusion • Game theory, particularly the concept of the pris

What is external diseconomies, Q. What is External Diseconomies? The ex...

Q. What is External Diseconomies? The expansion of an industry is likely to generate external diseconomies that raise the cost of production. An increase in the size of industr

#sales maximisation theory, how realistic is the sales maximization model f...

how realistic is the sales maximization model from experience with business objectives as pursued by Zimbabwean firms

A monopolist faces a straight line demand curve which passes, A monopolist ...

A monopolist faces a straight line demand curve which passes through the point Rs 10 per ton on the price-cost axis and through the point 8000 tons on the quantity axis. The fir

Range of alternative uses of a commodity, Broader the range of other uses o...

Broader the range of other uses of a commodity, higher the price elasticity of its demand intended for the fall in price though less elastic for the increase in price. As price of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd