Question: Question 5:

In July the parks and recreation department in your town wants to organize an exhibition of local arts and crafts. The department is considering whether to hold the exhibit inside the downtown sports arena or outside in its open-air parking lot. However, the problem is that while planning the location of the exhibition, the planners face uncertainty about the weather. The weather bureau reports that there is only a 20 percent chance of rain. If the town holds the event inside the sports arena, after paying for the use of the facility, it expects to break even if it rains. If it does not rain, the town will make a profit of $15,000 from the event. On the other hand, if the exhibition is held outdoors, it can be either a great success or a real failure, depending on the weather. If it does not rain, the town will make a tidy profit of $35,000, but if it rains, it stands to lose $10,000. Draw a decision tree and explain the options open to the decision makers. What would be your recommendation?