Chapter 1 1. International House of Pancakes (IHOP) is a U.S.-based multinational restaurant chain that specializes in breakfast food. Due to declining sales, an IHOP franchisee must consider closing up to three of her least profitable locations. She meets with two consultants to discuss potential plans. The first consultant offers two plans. Plan A keeps one location open with certainty. Plan B has a one-in-three chance of saving all three locations but a two-in-three chance of saving no locations. The second consultant also offers two plans. Plan C will result in losing two locations with certainty. Plan D has a two-in-three chance of losing all locations but a one-in-three chance of losing no locations. If the franchisee chooses Plan A, she should also choose Plan: a. No plan results in the same outcome as Plan A. b. B. c. C. d. D. ANSWER: c 2. International House of Pancakes (IHOP) is a U.S.-based multinational restaurant chain that specializes in breakfast food. Due to declining sales, an IHOP franchisee must consider closing up to four of his least profitable locations. He meets with two consultants to discuss potential plans. The first consultant offers two plans. Plan A will result in losing two locations with certainty. Plan B has a three-in-four chance of losing all locations but a one-in-four chance of losing no locations. The second consultant also offers two plans. Plan C keeps two locations open with certainty. Plan D has a one-in-four chance of saving all four locations but a threein-four chance of saving no locations. If the franchisee chooses Plan B, he should also choose Plan: a. No plan results in the same outcome as Plan B. b. B. c. C. d. D. ANSWER: d 3. International House of Pancakes (IHOP) is a U.S.-based multinational restaurant chain that specializes in breakfast food. Due to declining sales, an IHOP franchisee must consider closing up to three of her least profitable locations. She meets with two consultants to discuss potential plans. The first consultant offers two plans. Plan A will result in losing two locations with certainty. Plan B has a two-in-three chance of losing all locations but a one-in-three chance of losing no locations. The second consultant also offers two plans. Plan C