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Senior management at Forever Young has identified a source of uncertainty not present in their intul assesment They have come to the conclusion that price in addition to demand and exchange rate are sources of uncertainty The initial price per unit is $20, but has a 70N probability of increasing by 10% and a 30% probability of decreasing by 10% each year. The wral demand is 1000 units but has a SON probability of increasing by 20% and a So% portability of decreasing by 20% Lastly, the current exchange rate is 6.5 yuan/dollar. The yuan can strengthen by 10% relative to the dollar with a probability of 20% or weaken by 10N with a probability of 30N As a ing star in the data analytics team, you volunteer to present a Tucson tree that captures the sources of uncertainty over the next two years at the next group meeting Build a decision tree that captures the three sources of uncertainty for the nest two yean Be sure to include values and associated probabilities Note the current period counts as year 1

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    $\begingroup$ Hi, please tag homework questions and textbook problems as self-study. It may also help to give your questions a more informative title. (See How to Ask.) $\endgroup$ – Arya McCarthy Apr 3 at 15:43
  • $\begingroup$ So we are given price, demand and exchange rate with probabilities for these figures to increase or decrease the next year. But what are we supposed to do with this? What does the senior management want to know from the data analytics team? Plan expand business? Plan to create larger stock? Plan to buy dollars for yuan's? What is the issue? $\endgroup$ – Sextus Empiricus Apr 3 at 15:58

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