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    Decision based on maximizing expected value

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    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:

    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.

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    $2.19