An orange grower in Florida faces a dilemma. Please read the attached images for

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An orange grower in Florida faces a dilemma. Please read the attached images for the rest of the question. Please use PrecisionTree and explain your steps throuroughly as well as any values you used. I am new to the software and a step by step guide of evetything you did and clicked on is what I need to understand the answer to the question. Thank you.

5.8. An orange grower in Florida faces a dilemma. The weather forecast is for cold weather, and there is a 50% chance that the temperature tonight will be cold enough to freeze and destroy his entire crop, which is worth some $50,000. He can take two possible actions to try to alle- viate his loss if the temperature drops. First, he could set burners in the

Explanation / Answer

We only look at the scenarios when the temperature is cold enough to destroy crops as in the other case there is no loss

So, the grower must choose burners as the expected loss is the least in that case.

Scenario Loss when temperature is cold Loss otherwise(fair weather) Expected loss No action 50000 0 0.5*50000+0.5*0=25000 Set burners 5000 + 20000(taking max damage) = 25000 5000 (cost of burner) 25000*0.5+5000*0.5=15000 Sprinklers 2000+30000=32000 2000 0.5*(2000+32000) = 17000

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