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Blake Electronics

The document presents a decision tree for Blake Electronics considering whether to introduce a new product. It shows the probabilities and outcomes of conducting a survey through MAI or I&K, and then deciding whether to introduce the product. It calculates the posterior probabilities based on the results of a favorable or unfavorable survey from I&K. If the survey is favorable, there is a 87% chance of a successful venture, and if the survey is unfavorable there is a 84% chance of an unsuccessful venture.

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763 views508 pages

Blake Electronics

The document presents a decision tree for Blake Electronics considering whether to introduce a new product. It shows the probabilities and outcomes of conducting a survey through MAI or I&K, and then deciding whether to introduce the product. It calculates the posterior probabilities based on the results of a favorable or unfavorable survey from I&K. If the survey is favorable, there is a 87% chance of a successful venture, and if the survey is unfavorable there is a 84% chance of an unsuccessful venture.

Uploaded by

k_chops
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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0.

50
Favourable survey

Blake Electronics
$0

Hire MAI
-$100,000

$500,000

0.50
Unfavourable survey
$0

Survey
1
$0

$500,000

0.62
Favourable survey
$0

Hire I&K

-$300,000

$468,800

0.38
Unfavourable survey
2
$700,000

$0

No product
$0

$0

No survey
2
$0

0.6
Successful venture

$700,000
Introduce product
-$500,000

$700,000

$2,000,000
0.4
Unsuccessful venture
$0

Do nothing
$0

$0

0.7
Successful venture
$1,400,000
Introduce product
-$500,000

$800,000

$2,000,000

$1,400,000

0.3
Unsuccessful venture

avourable survey

-$600,000
1

$0

-$600,000

$800,000
No product
-$100,000
$0

-$100,000
0.4
Successful venture
$1,400,000

Introduce product
-$500,000

$200,000

$2,000,000

$1,400,000

0.6
Unsuccessful venture

nfavourable survey

-$600,000
1

$0

-$600,000

$200,000
No product
-$100,000
$0

-$100,000
0.87
Successful venture
$1,200,000

Introduce product
-$500,000

$940,000

$2,000,000

$1,200,000

0.13
Unsuccessful venture

avourable survey

-$800,000
1

$0

-$800,000

$940,000
No product
-$300,000
$0

-$300,000
0.16

Successful venture
$1,200,000
Introduce product
-$500,000

-$480,000

$2,000,000

$1,200,000

0.84
Unsuccessful venture

nfavourable survey

-$800,000
2

$0

-$800,000

-$300,000
No product
-$300,000
$0

-$300,000

$0

uccessful venture
$1,500,000
$1,500,000

nsuccessful venture
-$500,000
-$500,000

$0

ID
0
0
0
0
20
21
22
23
24
25
26
27
28
29
0
0
0
0
19
0

Name
0 TreePlan
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

Value

Prob
0

Pred
0
0
0
0

0
0

0
0

0.00
0.00

0
0

0
0

0
0

0
0
0
0
18
18
4
4
6
6
5
5
10
10
2
2
15
15
1
1
19
19
20
20
22
22
21
21
26
26

Kind
D
D
D
T
D
D
E
T
T
T
E
T
T
T
T
E
T
T
E
E
D
D
E
T
T
T
E
T
T
T

NS

S1
3
2
2
0
2
2
2
0
0
0
2
0
0
0
0
2
0
0
2
2
2
2
2
0
0
0
2
0
0
0

S2
1
18
14
0
6
10
8
0
0
0
12
0
0
0
0
16
0
0
4
20
22
26
24
0
0
0
28
0
0
0

S3
2
19
15
0
7
11
9
0
0
0
13
0
0
0
0
17
0
0
5
21
23
27
25
0
0
0
29
0
0
0

S4
3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

S5
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Row
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Col
53
30
65
77
8
23
4
12
2
7
19
27
17
22
62
69
67
72
15
45
38
53
34
42
32
37
49
57
47
52

1
5
5
5
13
13
17
17
21
21
17
17
21
21
9
9
13
13
9
9
13
13
17
17
21
21
17
17
21
21

Mark
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE
TRUE

Case: Blake Electronics


Prior Probabilities

P(Successful venture) =
P(Unsuccessful venture) =

0.60
0.40

P(Fav survey | Failure) =


P(Unfav survey | Failure) =

Probabilities from MAI


P(Successful venture | Fav survey) =
P(Unsuccessful venture | Fav survey) =

P(Successful venture | Unfav survey) =


P(Unsuccessful venture | Unfav survey) =
P(Favorable survey) =
P(Unfavorable survey) =

Conditional probabilities from I&K


P(Fav survey | Succes) =
P(Unfav survey | Success) =

0.70
0.30
0.40
0.60
0.50
0.50

0.90
0.10
0.20
0.80

Posterior probabilities for I&K GIVEN Fav survey

Outcome
Success
Failure

Conditional prob
Prior
P(Fav survey | Outcome)
prob
0.90
0.60
0.20
0.40
P(Fav survey) =

Joint
prob
0.54
0.08
0.62

Posterior probabilities for I&K GIVEN pilot fails

Outcome
Success
Failure

Conditional prob
Prior
P(Unfav survey | Outcome) prob
0.10
0.60
0.80
0.40
P(Unfav survey) =

Joint
prob
0.06
0.32
0.38

Posterior
prob
0.87
0.13

Posterior
prob
0.16
0.84

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