3. The concessions manager at the Clemson vs. USC football game must decide whether to have the vendors sell sun visors or umbrellas. There is a 30% chance of rain, a 15% chance of overcast skies, and a 55% chance of sunshine, according to weather forecasts for the Columbia SC on game day. The manager estimates that the following profits will result from each decision, given each set of weather conditions:
Decision Rain Overcast Sunshine
Prob. .30 .15 .55
Sun visors $-500 $-200 $1,500
Umbrella 2,000 0 -900
Compute the expected value for each decision and select the best one.© BrainMass Inc. brainmass.com October 9, 2019, 9:45 pm ad1c9bdddf
This solution illustrates the process of making a decision based on maximizing expected value. Please see attached file for details.