• Profile photo of John Moffat says

      You can start like that if you want.

      But it would make no difference at all because from the ‘no market research’ branch you would immediately have another decision – ‘expensive’ or ‘cheap’ refurbishment.

      (The tree is only to help keep track of the various decisions, so for this bit of it you can draw it either way)

  1. avatar says

    Hi John. In the third paragraph of this example, (in EITHER case the probability of the refurbishment achieving a good result has been estimated to be 2/3). Why are we not using 2/3 on the ‘buy market research’ path?

    • Profile photo of John Moffat says

      Buying market research is our choice – so buying itself is not uncertain and therefore no probability is relevant.

      As to what happens if we do buy the research, the question says (in the next to the last paragraph) that the probability then of the result being good is 91%.

      (If the research was perfect, then if it said ‘good result’ then getting a good result would be certain. Here, the research is not perfect and so it is not certain to be ‘good result’ but it has a very high probability. Similarly, if the research says ‘bad result’ then the probability of the research being wrong and getting a ‘good result’ is 13%)

      I hope that makes sense.

  2. avatar says

    Dear John. I’ve sat only F4 so far and don’t remember whether we could use black pen only. Are we allowed to use different colours in F5 to make our graphs and decision trees more understandable?

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