Video Tech is considering marketing only one of two new video games for the coming holidayseason: Battle Pacific or Space Pirates. Battle Pacific is a unique game and appears to have nocompetition. Estimated profits (in thousands of dollars) under high, medium and low demand areas follows:Market DemandBattle Pacific High Medium LowProfit $1000 $700 $100Probability 0.2 0.5 0.3Video Tech is optimistic about its Space Pirates game, however, it is concerned that the game’sprofitability will be affected by a competitor’s introduction of a video game viewed as similar toSpace Pirates. Estimated profits (in thousands of dollars) with and without competition are asfollows:Market DemandSpace PiratesWith CompetitionHigh Medium LowProfit $750 $350 ‐$75Probability 0.3 0.4 0.3Market DemandSpace PiratesWithout CompetitionHigh Medium LowProfit $1600 $800 $400Probability 0.5 0.3 0.2For planning purposes, Video Tech believes there is a 0.6 probability that its competition willproduce a new game similar to Space Pirates for the upcoming Holiday Season.Complete the following:a) Using Treeplan.xla, create the decision tree for Video Tech problem. State yourrecommended decision for Video Tech according to the EMV decision criterion.b) State the risk profile of the optimal decision according to the EMV criterion.c) Create a sensitivity table (ie Data Table in Excel) showing how the optimal decision mightchange if the probability of the Space Pirates game having competition varies from 0% to100% in steps 10%.d) State what the sensitivity table in part c) means in the context of the decision problem.
qualityassignments.net is a custom writing service that provides online on-demand writing work for assistance purposes. All the work should be used in accordance with the appropriate policies and applicable laws.
Phone: +1 (940) 905 5542