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James Bernard, head of leasing at New Braunfels Inc., has to decide whether to build a new state-of-the-art processing facility. If the new facility works, the company could realize a profit of $200,000. If it fails, New Braunfels could lose $150,000. At this time, he estimates a 60% chance that the new process will fail. The other option is to build a pilot plant and then decide whether to build a company-wide facility. The pilot plant would cost $10,000 to build. James estimates a 50-50 chance that the pilot plant will work. If the pilot plant works, there is a 90% probability that the complete plant, if it is built, will also work. If the pilot plant does not work, there is only a 20% chance that the complete project (if it is constructed) will work. Should he build the plant or build the pilot project and then make a decision?
Create a decision tree.
What recommendation, based on expected value, would you give James?
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During the past month, a customer satisfaction survey was given to 200 customers at a local fast-food restaurant.
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Katy Bread, Victoria packs 12 loaves of bread in each case. Katy Bread must decide how many cases of Bread to stock each week to meet demand. Each case cost $10 and sells for $12. Unsold cases are sold to a local grocers for $2 per case. If there is ..
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Identify three principles of leadership that you think would be most important to include in the training for supervisors in a customer care company.
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