Reference no: EM132113816

Juan Cruz manages an organic products depot in a neighborhood of San Juan. To replenish his organic vegetables’ supply, Juan buys boxes of these products early in the morning from ACA, an agricultural cooperative located in Arecibo. Historically, about 90 percent of the boxes of vegetables bought in ACA turns out to be of satisfactory quality. A satisfactory box contains 80 percent excellent vegetables and will earn $80 profit for Juan. An unsatisfactory box contains 30 percent excellent vegetables and will produce a loss of $200. Before Juan decides to accept a box, ACA gives Juan the opportunity to sample one piece of vegetables to test whether it is excellent. Based on that sample, he then has the option of rejecting the box without paying for it. Juan wonders (1) whether he should continue buying from ACA, (2) if so, whether it is advisable sampling just one piece of vegetable from a box, and (3) if so, whether he should be accepting or rejecting the box based on the outcome of this sampling. Based on a decision tree model (you must show the tree), explain the best decision Juan should make.