Essentials of Business Analytics 1st Edition by Jeffrey Camm,James Cochran,Michael Fry,Jeffrey Ohlmann ,David Anderson

Exercise 24

To save on expenses, Rona and Jerry agreed to form a carpool for traveling to and from work. Rona prefers to use the somewhat longer but more consistent Queen City Avenue. Although Jerry prefers the quicker expressway, he agreed with Rona that they should take Queen City Avenue if the expressway has a traffic jam. The following payoff table provides the one-way time estimate in minutes for traveling to or from work: Based on their experience with traffic problems, Rona and Jerry agreed on a 0.15 probability that the expressway would be jammed.
In addition, they agreed that weather seemed to affect the traffic conditions on the expressway.
Let

The following conditional probabilities apply:

a. Use Bayes' theorem for probability revision to compute the probability of each weather condition and the conditional probability of the expressway being open, s 1, or jammed, s 2, given each weather condition.
b. Show the decision tree for this problem.
c. What is the optimal decision strategy, and what is the expected travel time