A paint company has three sources for buying bright red pigment for their paints: Vietnam, Taiwan, or Thailand.Unfortunately, the pigment is made from a bush whose annual growth is heavily dependent upon the amount of rainfall during the growing season.The tables below show probabilities and prices for wet, dry and normal growing seasons:

a.Using decision tree analysis, what is the expected value (price) for Thailand?
b.What country should the company select and what is the expected value (price) associated with it?

Question

A paint company has three sources for buying bright red pigment for their paints: Vietnam, Taiwan, or Thailand.Unfortunately, the pigment is made from a bush whose annual growth is heavily dependent upon the amount of rainfall during the growing season.The tables below show probabilities and prices for wet, dry and normal growing seasons:
 
a.Using decision tree analysis, what is the expected value (price) for Thailand?
b.What country should the company select and what is the expected value (price) associated with it?

Quizplus · Accepted Answer

The Answer of A paint company has three sources for buying bright red pigment for their paints: Vietnam, Taiwan, or Thailand.Unfortunately, the pigment is made from a bush whose annual growth is heavily dependent upon the amount of rainfall during the growing season.The tables below show probabilities and prices for wet, dry and normal growing seasons:
 
a.Using decision tree analysis, what is the expected value (price) for Thailand?
b.What country should the company select and what is the expected value (price) associated with it?

A Paint Company Has Three Sources for Buying Bright Red