Decision Tree - Case Study



Decision Tree - Case Study

The Decision Tree

Calculation of Results

EMV (Glenn's Bid Accepted and zonal change approved by the voters) = 0.2*0.3*0.9*13,000,000 = 702000

EMV (Glenn's Bid Accepted and zonal change disapproved by the voters) = 0.2*0.3*0.1*13,000,000 = 78000

EMV (Glenn's Bid not accepted zonal change approved by the voters) = 0.2*0.7*0.2*13,000,000 = 364000

EMV (Glenn's Bid not accepted zonal change disapproved by the voters) = 0.2*0.7*0.8*13,000,000 = 1456000

EMV = 0 for Glenn's bid not accepted because the 10% money he invested would be refunded to him.

Decision strategy for Oceanview

For Glen, the most profitable decision shall be to follow the ...