Homework-Chapter13 - Chapter 13 Homework 10 Video Tech is...

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Chapter 13: Homework 10. Video Tech is considering marketing one of two new video games for the coming holiday season: Battle Pacific or Space Pirates. Battle Pacific is a unique game and appears to have no competition. Estimated profits (in thousands of dollars) under high, medium, and low demand are as follows: Demand Battle Pacific High Medium Low Profit $1000 $700 $300 Probability 0.2 0.5 0.3 Video Tech is optimistic about its Space Pirates game. However, the concern is that profitability will be affected by a competitor’s introduction of a video game viewed as similar to Space Pirates. Estimated profits (in thousands of dollars) with and without competition are as follows. Demand Space Pirates with Competition High Medium Low Profit $800 $400 $200 Probability 0.3 0.4 0.3 Demand Space Pirates without Competition High Medium Low Profit $1600 $800 $400 Probability 0.5 0.3 0.2 a) Develop an influence diagram and a decision tree for the Video Tech problem b) For planning purposes, Video Tech believes there is a 0.6 probability that its competitor will produce a new game similar to Space Pirates. Given this
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