Decision tree to determine the best type of campaign to run- Operation Management
You are a fundraiser for SJSU. To raise funds, you can run either a telephone campaign or an email campaign. If you run a telephone campaign, there’s a 40% chance that you will raise $100,000 and a 60% chance that you’ll raise $150,000. An email campaign will raise $90,000 with probability 30% and $140,000 with probability 70%. (a) Use a decision tree to determine the best type of campaign to run. (b) Draw a risk profile for the optimal decision. (c) Right now there is a 70% chance that an email campaign will raise $140,000. How much higher or lower would this probability need to be in order for you to switch the type of campaign that you would run? (d) Right now the most that a telephone campaign would raise is $150,000. How much higher or lower would this amount have to be in order for you to switch the type of campaign that you would run?
