Calculate the expected value of each option

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Reference no: EM133450573

Case Study: John owns a small restaurant that specializes in serving healthy food. He is considering expanding his business by opening a new location in a nearby town. However, he is unsure about the feasibility and profitability of this decision.

Your task is to conduct several analyses to help John make an informed decision about expanding his business.

Analysis 1: Decision Tree Analysis

Develop a decision tree to analyze the various possible outcomes of John's decision to expand his restaurant business. Consider the different scenarios that may occur, such as the cost of opening a new location, the potential revenue generated, and the impact on the existing business.

Guidelines:

Identify the decision to be made and the different options available.
Determine the possible outcomes and the probability of each outcome.
Identify the costs and benefits associated with each outcome.
Calculate the expected value of each option.

Analysis 2: SWOT Analysis

Conduct a SWOT analysis to evaluate the strengths, weaknesses, opportunities, and threats associated with John's decision to expand his restaurant business.

Guidelines:

Identify the strengths and weaknesses of the existing business.
Identify the opportunities and threats of expanding the business to a new location.
Consider factors such as market demand, competition, financial resources, and operational capabilities

Analysis 3: Cost/Benefit-Risk Analysis

Conduct a cost/benefit-risk analysis to evaluate the potential risks and rewards associated with John's decision to expand his restaurant business.

Guidelines:

Identify the potential costs and benefits of expanding the business.
Determine the probability of each outcome occurring.
Assign a dollar value to each outcome.
Calculate the expected value of the decision.

Analysis 4: Multicriteria Decision Analysis

Conduct a multicriteria decision analysis to compare and evaluate the different options available to John for expanding his restaurant business.

Guidelines:

Identify the decision criteria, such as financial performance, customer satisfaction, and employee satisfaction.
Assign weights to each criterion to reflect its relative importance.
Evaluate each option against each criterion and assign a score to each option.
Calculate the overall score for each option

Reference no: EM133450573

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