Earl Shell Owns His Own Sno-Cone Business and Lives 30

question 9

Essay

Earl Shell owns his own Sno-Cone business and lives 30 miles from a beach resort. The sale of Sno-Cones is highly dependent upon his location and upon the weather. At the resort, he will profit $120 per day in fair weather, $10 per day in bad weather. At home, he will profit $70 in fair weather, $55 in bad weather. Assume that on any particular day, the weather service suggests a 40% chance of foul weather.
(a) Construct Earl's decision tree.
(b) What decision is recommended by the expected value criterion?

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Definitions:

Vulcanization

A chemical process for converting natural rubber or related polymers into more durable materials via the addition of sulfur or other equivalent curatives or accelerators.

Synthetic Rubber

A man-made elastomer designed to mimic natural rubber, noted for its elasticity and produced through polymerization processes.

Saran

A synthetic polymer known for its barrier properties, particularly for preventing the passage of water vapor; used in food wrap and various coatings.

Alternating Copolymer

A polymer made from two different monomers arranged in an alternating sequence throughout the chain.