Essay
A paint company has three sources for buying bright red pigment for their paints: Vietnam, Taiwan, or Thailand.Unfortunately, the pigment is made from a bush whose annual growth is heavily dependent upon the amount of rainfall during the growing season.The tables below show probabilities and prices for wet, dry and normal growing seasons:
a.Using decision tree analysis, what is the expected value (price) for Thailand?
b.What country should the company select and what is the expected value (price) associated with it?
Correct Answer:
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a. EV (Thailand) = .4(.90) + .4(1.15) + ...View Answer
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