pls answer the 2nd question:The Montemar Company is considering contracting with a market research firm to do a survey to determine future market conditions. The results of the survey will indicate either positive or negative market conditions. There is a 0.60 probability of a positive report, given favorable conditions; a 0.30 probability of a positive report, given stable conditions; and 0.10 probability of a positive report; given unfavorable conditions. There is a 0.90 probability of negative report, given unfavorable conditions; a 0.70 probability given stable conditions; and a 0.40 probability, given favorable conditions.d & e, as per the guidelines The Montemar...Company is going to introduce one of three new products: a widget, ahummer, or a Nimnot. The market conditions (favorable, stable, or unfavorable) willdetermine the profit or loss the company realizes, as shown in the following payoff table:ProductWidgetHummerNimnotFavorable (0.20)$120,00060,00035,000Market ConditionsStable (0.70)$70,00040,00030,000Unfavorable (0.10)($30,000)20,00030,000a) Draw the decision tree.b) Compute the expected value for each decision and select the best one.c) Develop the opportunity loss table and compute the expected opportunity loss or eachproduct.d) Determine how much the firm would be willing to pay to a market research firm togain better information about future market condition. The Montemar Company is considering contracting with a market research firm to do asurvey to determine future market conditions. The results of the survey will indicate eitherpositive or negative market conditions. There is a 0.60 probability of a positive report, givenfavorable conditions; a 0.30 probability of a positive report, given stable conditions; and 0.10probability of a positive report; given unfavorable conditions. There is a 0.90 probability ofnegative report, given unfavorable conditions; a 0.70 probability given stable conditions; anda 0.40 probability, given favorable conditions.a) Draw the revised decision tree.b) Determine the decision strategy the company should follow.c) Determine the expected value of the strategyd) Determine the maximum amount the company should pay the market research firm forthe survey results.e) Compute the efficiency of the sample information for the Montemar Company.

Find the given details below: Given details: Market Conditions Product Favorable (0.2)…

The Montemar Company is considering contracting with a market research firm to do a survey to determine future market conditions. The results of the survey will indicate either positive or negative market conditions. There is a 0.60 probability of a positive report, given favorable conditions; a 0.30 probability of a positive report, given stable conditions; and 0.10 probability of a positive report; given unfavorable conditions. There is a 0.90 probability of negative report, given unfavorable conditions; a 0.70 probability given stable conditions; and a 0.40 probability, given favorable conditions. a) Draw the revised decision tree. b) Determine the decision strategy the company should follow. c) Determine the expected value of the strategy d) Determine the maximum amount the company should pay the market research firm for the survey results. e) Compute the efficiency of the sample information for the Montemar Company.

The Montemar Company is considering contracting with a market research firm to do a survey to determine future market conditions. The results of the survey will indicate either positive or negative market conditions. There is a 0.60 probability of a positive report, given favorable conditions; a 0.30 probability of a positive report, given stable conditions; and 0.10 probability of a positive report; given unfavorable conditions. There is a 0.90 probability of negative report, given unfavorable conditions; a 0.70 probability given stable conditions; and a 0.40 probability, given favorable conditions. a) Draw the revised decision tree. b) Determine the decision strategy the company should follow. c) Determine the expected value of the strategy d) Determine the maximum amount the company should pay the market research firm for the survey results. e) Compute the efficiency of the sample information for the Montemar Company.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 31P

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