Amazon has to make a decision if they want a Christmas item for which demand can be high, medium, or low. Amazon can purchase 1 shipment, 2 shipments, or 3 shipments of the item.
Profit projections in thousands are:
High Medium Low
Purchase 1 shipment 40 40 30
Purchase 2 shipments 60 60 10
Purchase 3 shipments 80 50 0
You have decided to ask the marketing department if they feel how probable the item will sell. The probability of selling being good is 60% and fair is 40%. If the probability is good for selling, then high demand will be 40%, medium demand will be 30%, and low demand will be 30%. Likewise if the probability is fair for selling, then high demand will be 20%, medium demand will be 30% and low demand will be 50%. You don’t have to ask the marketing department for advise, you could go by your last quarters report instead and high demand was 30%, medium demand was 40%, with low demand at 30%.
Make the decision tree and show all of your work. What will be your decision? Would you seek extra advice from the marketing department
Profit projections in thousands are:
High Medium Low
Purchase 1 shipment 40 40 30
Purchase 2 shipments 60 60 10
Purchase 3 shipments 80 50 0
You have decided to ask the marketing department if they feel how probable the item will sell. The probability of selling being good is 60% and fair is 40%. If the probability is good for selling, then high demand will be 40%, medium demand will be 30%, and low demand will be 30%. Likewise if the probability is fair for selling, then high demand will be 20%, medium demand will be 30% and low demand will be 50%. You don’t have to ask the marketing department for advise, you could go by your last quarters report instead and high demand was 30%, medium demand was 40%, with low demand at 30%.
Make the decision tree and show all of your work. What will be your decision? Would you seek extra advice from the marketing department
