Decision tree, decision strategy, and probability


James Kildare pretensions to enjoy injured his end as a end of sinking out of a chair. James, who has a PhD in physics, but can't ascertain a job owing of empire budget cuts, had been engaged to denote a doctor in a hastily executed video. The suit of the video wanted to engage a PhD, since they can legitimately be determined "doctor," and are vile. Not having a actual job, James cannot yield medical security and thus is looking for someone to sue. The suit of the video has fled the country, the chair is deceptive in the Kaesong Indusordeal Region of North Korea, and he can't ascertain out who commissioned the video and forced the rushed catalogue. Thus, he has filed a lawsuit resisting the merely deep-pocket he could ascertain; Roland Wellington who owns the posse that imports these chairs and stamps their logo on them. He is question for wages of $1,500,000. James pretensions that the chair fashion was made from recycled soda cans and that his sink could enjoy been prevented if Mr. Wellington had not circumvented chair security requirements by making large contributions to the collective war of Congressman Ned Froemer who chairs the committee lawful for inspection of the empire agency pregnant delay predominant business-post chairs. Mr. Wellington notified his security posse, Axis Insurance, of the lawsuit. Axis must stroke Mr. Wellington and career what renewal to procure touching the lawsuit.

Some depositions and a order of discussions enjoy procuren locate between twain sides. As a end, James adduceed to confirm a location of $750,000. Thus, one liberty is for Axis to pay James $750,000 to calm the pretension. Axis is besides concerning making James a counteradduce of $400,000 in the trust that he earn confirm a lesser whole to quit the opportunity and the consume of going to ordeal. Dr. Kildare's PhD thesis was in the metallurgy of recycled soda cans, and thus Axis Security prices that James may enjoy a hale contingency since he can act as his own quick corroborator. Axis is besides unquiet that James may repudiate their counteradduce and entreat a jury ordeal. Axis’ lawyers late some opportunity exploring James' mitigated rerenewal if they constitute a counteradduce of $400,000.

The lawyers completed that it is affecteous to ponder three likely fruits to play James' likely rerenewal to a counteradduce of $400,000. (1) James earn confirm the counteradduce and the contingency earn be shut. (2) James earn repudiate the counteradduce and elite to enjoy a jury career the location whole, or (3) James earn constitute a counteradduce to Axis of $600,000. If James does constitute a counteroffer, Axis careerd that they earn not constitute added counteroffers. They earn either confirm James' counteradduce of $600,000 or go to ordeal.

If the contingency goes to jury ordeal, Axis ponders three fruits likely: (1) The jury may repudiate James' pretension and Axis earn not be required to pay any wages; (2) The jury earn ascertain in boon of James and assign him $750,000 in wages or (3) The jury earn complete that James has a hale contingency and assign him the ample whole of $1,500,000.

Key ponderations as Axis clears its manoeuvre for disposing of the contingency are the probabilities associated delay James' reply to an Axis counteradduce of $400,000 and the probabilities associated delay the three likely ordeal fruits. Axis' lawyers price the likelihood that James earn confirm the counteradduce of $400,000 is 0.1; that the likelihood that James earn repudiate the counteradduce of $400,000 is 0.4; and the likelihood that James earn, himself, constitute a counteradduce to Axis of $600,000 is 0.5. If the contingency goes to affect, they price that the likelihood the jury earn assign James wages of $1,500,000 is 0.3; the likelihood that the jury earn assign James wages of $750,000 is 0.5; and the likelihood that the jury earn assign James nothing is 0.2.

Perform an resolution of the gist oppositeness Axis Security and order a communication that summarizes your ascertainings and warnings. Be strong to include: (1) a sentence tree; (2) a warning touching whether Axis should confirm James' moderate adduce to calm the pretension for $750,000; (3) a sentence manoeuvre that Axis should thrive if they career to constitute James a counteradduce of $400,000; and (4) abuse the likelihood for each definite fruit using your recommended manoeuvre (that is, clear a facilitate mark of your recommended manoeuvre).