Unformatted text preview: is $1200/month with a three-year lease. The smaller office is available at $800/month for three years, but its lease offers an option to move to a larger suite after one and a half years. The cost of the larger suite would then be $1400/month. Expected revenues are: Small office, current demand: $1000/month Small office, higher demand: $1100/month Large office, current demand: $1000/month Large office, higher demand: $1600/month The probability of having the current demand for the three years is estimated to be 0.3, while the probability of having the higher demand is 0.7. a. Construct a decision tree. b. Find the best decision(s)....
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- Spring '07
- current demand, higher demand, Prof Uday, Hitech Systems