DEVRY BSOP 209 Entire CourseDEVRY BSOP 209 Entire Course DEVRY BSOP 209 Week 6 Homework Assignment | Page 2

e) Develop a decision tree. Assume each outcome is equally likely, then find the highest EMV. • A.3 Clay Whybark, a soft-drink vendor at Hard Rock Cafe’s annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd): Alternatives Large Stock Average Stock Small Stock Big $ 22000 $ 14000 $ 9000 States of Nature ( demand) Average $ 12000 $ 10000 $ 8000 Small -$ 2000 $ 6000 $ 4000 The probabilities associated with the states of nature are 0.3 for a big demand, 0.5 for an average demand, and 0.2 for a small demand. a) Determine the alternative that provides Clay Whybark the greatest expected monetary value (EMV). b) Compute the expected value of perfect information (EVPI).