An expansion program

Assignment Help Operation Management
Reference no: EM13843677

A regional fast-food restaurant is considering an expansion program. The major factor influencing the success of such a program is the future level of interest rates. It is estimated that there is a 40 percent chance that interest rates will increase by 3 percentage points, a 35 percent chance that they will remain the same, and a 25 percent chance that they will decrease by 3 percentage points. The alternatives they are considering and possible payoffs are shown in the following table:

                                                           Rates                 Rates                   Rates

                                                       Increase           No Change           Decrease

Build 50 new places                    -$100,000         +$150,000          +$250,000

Build 25 new places                     -$80,000           +$100,000         +$180,000

Do Nothing                                     -$50,000            +$50,000         +$125,000

Using decision tree analysis, calculate the expected value of each alternative, and decide which would be the best to follow. 

Reference no: EM13843677

Questions Cloud

Which of the following is a contra receivable account? : Which of the following is a contra receivable account?
Write the code for adding a task : write the code for adding a task to this array when the user enters a task in the first text box and clicks the Add Task button. This code should also blank out the text box. At this point, don't worry about displaying the tasks in the text area f..
Train apprentice mechanics : If the profit of Vroom Ltd exceeds $3 million, Freda receives the maximum bonus of $30 000. Vroom Ltd currently receives a grant from the government of $100 000 per year to employ and train apprentice mechanics.
What is the periodic interest rate : You are purchasing a house that cost $500,000.You plan on making a down payment of $100,000 and borrowing the difference.The terms of your mortgage will be $ 400,000 in principal, 30-year term, and a fixed APR 3.875 %. The loan payments are monthly a..
An expansion program : A regional fast-food restaurant is considering an expansion program. The major factor influencing the success of such a program is the future level of interest rates. It is estimated that there is a 40 percent chance that interest rates will increase..
Summarize the given ppt and analysis with own thoughts : Summarize the atteched PPT and analysis with own thoughts- Rob Elliott, vice president of government affairs for MGM Mirage
Write a statement that''s reads an integer value : Write a statement That's reads An integer value from Standard imput Val. Assume val Has already been declared as int variable. Assume Also stdin is a variable That reference A scanner object Associated with standard imput.
How a vertical scroll bar is associated with a list box : What are instance variables, and what role does the name ‘self' play in the context of a class definition. Describe how a vertical scroll bar is associated with a list box.
Write a c program that will read the required values : Write a C program that will read the required values from the input file, compute the hole to depth ration, the ideal number of sticks, the ideal powder charge, the actual powder charge, and the actual number of sticks.

Reviews

Write a Review

Operation Management Questions & Answers

  Exactly how should sustainability be best defined

Exactly how should "sustainability" be best defined when making it part of a gold statement or performance objective for a business or organization?

  Economists believe the free rider problem is much important

economists believe the free rider problem is very important in complex business organizational structures. still

  Why a low-cost provider strategy is well-suited to industry

Walmart's low-cost position in the supermarket industry. Explain in 250 words or more how Walmart has built its low-cost advantage in the industry and why a low-cost provider strategy is well-suited to the industry.

  How would you present your ideas to your boss

Explain the pros and cons of keeping the sign up, including the possible effects it would have on customer relationships. How would you present your ideas to your boss? If you were in charge, what would you do in this situation?

  Discuss on international business strategy

Discuss on international business strategy, what would you say the phrase meant? For example, Starbucks is known for its global strategy while maintaining the local ambience in its coffee shops. Let me know what your thoughts are.

  The fda claims it has the right to classify new products

The FDA claims it has the right to classify new products as drugs and prevent their distribution until their safety is determined and approved for sale on the open market. Digesti-Aid disputes the FDA's decision and wants to bring a lawsuit to cha..

  What are the factors influencing the development

what are the factors influencing the development of organizational ethis ?

  Create a holistic, interactive and transdisciplinary system

Integrate and revise the systems maps from your individual assignments to create a holistic, interactive, and transdisciplinary system map of the current state of the Japanese auto supply chain.

  Analyze the future of cookie usage by looking

Analyze the future of cookie usage by looking at the advantages and disadvantages, along with the current business and consumer climate.

  Create a win-win situation by sharing

Create a win-win situation by sharing rather than competing between entities

  What are the break-even quantity and cost

A production plant with annual rent of 100,000 SAR and a total salary of 25,000 SAR per month. The variable cost per unit is 40 SAR and it is sold for 100 SAR. What are the break-even quantity and cost? Illustrate with a break-even chart.

  Calculation of economic order quantity

Calculation Of Economic Order Quantity

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd