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Consider the decision tree we constructed for IDEA in Session 1 of week 4. Assume that all of the data used in the example remain the same except for the probability of the market remaining weak or strong.

ByAdmin August 4, 2021August 4, 2021

Question 1

Consider the decision tree we constructed for IDEA in Session 1 of week 4. Assume that all of the data used in the example remain the same except for the probability of the market remaining weak or strong. Suppose that, instead of a 0.5 chance that the market is strong, the probability that the market is strong is now 0.6.

Given the probability that the market is strong is 0.6, what is IDEA’s maxi-min decision?

1 point

IDEA should choose no supplier. Choosing either Supplier S or Supplier P would be worse.

IDEA should choose Supplier S. Choosing either Supplier P or no supplier would be worse.

IDEA should choose either Supplier S or Supplier P. Choosing no supplier would be worse.

None of these

IDEA should choose Supplier P. Choosing either Supplier S or no supplier would be worse.

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