Construct a decision tree

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Reference no: EM13752307

Karen Villagomez, president of Wright Industries, is considering whether to build a manufacturing plant in the Ozarks. Her decision is summarized in the following table:
Alternatives Favourable Unfavourable
Build Large Plant 400,000 (300,000)
Build Small Plant 80,000 (10,000)
Don't build - -
Market probabilities 0.4 0.6

(a) Construct a decision tree.
(b) Determine the best strategy using expected monetary value (EMV).
(c) What is the expected value of perfect information(EVPI)?

Reference no: EM13752307

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