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A.23 Deborah Kellogg buys Breathalyzer test sets for the Winter Park Police Department

Price:
$12.99


Product Description

A.23 Deborah Kellogg buys Breathalyzer test sets for the Winter Park Police Department. The quality of the test sets from her two suppliers is indicated in the following table:

 For example, the probability of getting a batch of tests that are 1% defective from Winter Park Technology is .70. Because Kellogg orders 10,000 tests per order, this would mean that there is a .70 probability of getting 100 defective tests out of the 10,000 tests if Winter Park Technology is used to fill the order. A defective Breathalyzer test set can be repaired for $0.50. Although the quality of the test sets of the second supplier, Dayton Enterprises, is lower, it will sell an order of 10,000 test sets for $37 less than Winter Park.

 

a.     Develop a decision tree.

 

b.    Which supplier should Kellogg use?

 

 

A.24 Joseph Biggs owns his own ice cream truck and lives 30 miles from a Florida beach resort. The sale of his products is highly dependent on his location and on the weather. At the resort, his profit will be $120 per day in fair weather, $10 per day in bad weather. At home, his profit will be $70 in fair weather and $55 in bad weather. Assume that on any particular day, the weather service suggests a 40% chance of foul weather. 

 

a.     Construct Joseph’s decision tree.

b.    What decision is recommended by the expected value criterion?

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