8 you are a party planner and you have beentasked to arrange a charity function. You havedone some research and found that you caneither have the party at a hotel, or you canhave it at the zoo or a local hall can be rented.If the function is popular and all the tickets aresold out the function should make a profit ofR800 000 if it is held at a Hotel, if it is held atthe zoo the profit will be R900 000 if it is at alocal hall the profit will be R1 000 000. If thefunction is unpopular and only few peopleattend a loss of R 250 000 will be made if thefunction is held at the hotel, at the zoo theloss will be R150 000 and at the local hall theloss will be R100 000. It is believed that theprobability of the function being popular is0.5. It is possible to place adverts to promotethe function. It will cost R50 000 to placeadverts. If the advertising campaign issuccessful the probability that the function willbe popular becomes 0.85. If the advertisingcampaign is unsuccessful the probability ofthe function being popular becomes 0.3.Draw a decision tree to decide what the bestoption would be.

Decision Tree is a Flow Chart that helps us map alternatives graphically which aids in making…

Answered: Draw a decision tree to decide what the…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section9.3: Single-stage Decision Problems

Problem 5P

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Draw a decision tree to decide what the best option would be.