Description

Purpose: 

To structure a complex problem and analyse different risky courses of action; to assess the interaction of probabilities of event outcomes; to prepare and interpret risk profiles

Task: 

• Answer parts (a) through (e) of the problem presented in this document. 

• Supplement your diagrams with a document (typed, 1.5 line spacing, 12 point Times Roman or other standard font, maximum length 5 pages of text excluding figures and tables) that outlines problem statements and assumptions, and presents your conclusions and recommendations. 

• In your decision trees, ensure that you have clearly indicated all decision and chance nodes, probabilities, consequence values and expected values. 

• Your decision trees can be either hand drawn (must be very neat and clear) or with the aid of a PC (such as the examples in lecture slides). 

• Indicate clearly in your report how you arrived at your conclusions about probability distributions for chance events. 

• Your report should also show your expected value calculations.