412DA-EngShoe[1] - Shopper 3 is likely (50%) to buy a $100...

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24 Example #1 Sean sells shoes on commission (10% of the shoe’s sale price.) He’s been doing this for years so he has first pick of the shoppers and knows the chances of their buying something or not (and leaving him without a commission) He can chose to help 3 different shoppers – Shopper 1 is considering purchasing an expensive ($300) pair of designer pumps, but has only a 20% chance of buying them. – Shopper 2 is certain to buy a $40 pair of sandals.
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Unformatted text preview: Shopper 3 is likely (50%) to buy a $100 pair of boots. Construct a decision tree to determine which shopper Sean should help if he wishes to maximize his expected value ($$$) How does the problem change if we also consider the fact that Shopper #1 is also 50% likely to return any of her purchases later (and thus Sean would lose his commission. (Shoppers #2 and #3 are less fickle)...
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This note was uploaded on 10/19/2011 for the course DS 412 taught by Professor Eng during the Spring '07 term at S.F. State.

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