Subject:Operations ManagementPrice:3.87 Bought7
Mary is thinking of suing the manufacturer of her car because of a defect that she believes caused her to have an accident, and kept her out of work for a year. She is suing the company for $3.5 million. The company has offered her a settlement of $700,000, of which Mary would receive $600,000 after attorneys’ fees. Her attorney has advised her that she has a 50% chance of winning her case. If she losses, she will incur attorneys’ fees and court costs of $75,000. If she wins she is not guaranteed of her full requested settlement. Her attorney believes that there is a 50% chance she could receive the full settlement, in which case Mary would get $2 million after her attorney takes his cut, and a 50% chance that the jury will award her a lesser amount of $1,000,000, of which Mary would get $500,000. Using decision tree analysis, decide if Mary should sue the manufacturer.