You must decide whether to hold a fundraising event indoors or outdoors. There is a 30%
likelihood of rain. If held outdoors, you estimate you can expect 1,000 attendees. If held
indoors, you have a much smaller capacity. The indoor venue costs $2,000 to rent and has a
capacity of 500. If the weather is bad, you think you can sell out an indoor event. But, if the
weather is nice, you may get lower turnout to an indoor event, and cannot expect more than
400 to show up. An outdoor venue costs only $500 for cleanup fees but is non-refundable.
However, if it rains, you risk having to cancel. You could rent a big tent which would hold some
of the activities if it were held outdoors. The tent costs $4,000, plus $1,000 to set up and take
down, day-of. If you rent the tent and it does not rain at all, you could decide not to put up the
tent. If it turns out to be rainy, having a tent will likely attract at least 300 attendees. If you have
no tent and it does rain, you will have to cancel the event and you estimate it will cost $1,000 in
administrative fees and non-refundable food and DJ deposits. You think you can sell tickets for
$20 regardless of whether it is indoors or outdoors.
a) Build a decision tree to represent the decision
b) What would your decision be? Why?