A European consortium has spent a considerable amount of time and money developing a new supersonic aircraft. The aircraft gets high marks on all performance measures except noise. In fact, b/c of the noise, the consortium's management is concerned that the US government may impose restrictions at some of the American airports where the aircraft can land. Management judges a 50-50 chance that there will be some restrictions. Without restrictions, management estimates its (present discounted) profit at $125 million; with restrictions, its profit would be only $25 million. Management must decide now, before knowing the governments decision, whether to redesign parts of the aircraft to solve the noise problem (in which case, full landing rights are a certainty) and a .4 chance it will fail. Using a decision tree, determine the consortium's best course of action, assuming management is risk Neutral.© BrainMass Inc. brainmass.com October 24, 2018, 10:53 pm ad1c9bdddf
A decision tree is applied.
Explain the parts of a decision tree and benefits for using it
Explain the parts of a decision tree.
What are some benefits of using decision trees?
In what ways can decision trees be used for business decisions? Name some real-world examples.View Full Posting Details