Construct decision tree, The Mobile Oil company has

Construct decision tree

Assignment Help Operation Management

Reference no: EM131367941

The Mobile Oil company has recently acquired oil rights to a new potential source of natural oil in Alaska. The current market value of these rights is $90,000 (Company can sell the project for $90,000). If there is natural oil at the site, it is estimated to be worth $800,000; however, the company would have to pay $100,000 in drilling costs to extract the oil. The company believes there is a 0.25 probability that the proposed drilling site actually would hit the natural oil reserve. Alternatively, the company can pay $30,000 to first carry out a seismic survey at the proposed drilling site. The probability of a favorable seismic survey is 60% and unfavorable seismic survey is 80%.

Construct a decision tree.

Reference no: EM131367941

Questions Cloud

Determine the qualitative forecasting techniques : From the scenario for Katrina's Candies, assuming the absence of quantitative data, determine the qualitative forecasting techniques that could be used within this scenario.

What is the approximate economic order quantity : A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?

Which the expectations are posted on the school grounds : Interview a certified elementary or middle school teacher about the school's behavior expectations for students, the school's behavior management program, and how these expectations are shared and made visible across the campus and in the classroo..

Better compete based on cost : Should employers cut pay to better compete based on cost, or pursue a different compensation policy (answer with a minimum 150 words)

Construct decision tree : The Mobile Oil company has recently acquired oil rights to a new potential source of natural oil in Alaska. The current market value of these rights is $90,000 (Company can sell the project for $90,000). Alternatively, the company can pay $30,000 to ..

How airbus and boeing develop their twenty-year forecasts : MBAA 523- First, briefly explain how Airbus and Boeing develop their 20-year forecasts. Note the factors that influence projected air travel growth; some factors affect the demand curves while others influence supply.

Workforce instead of a traditional office work force : What are some arguments used in favor of using a mobile workforce instead of a traditional office work force?

What are the costs and genetics of high turnover : You are on a newly formed -Service Excellence Committee" at Hillcrest Memorial Hospital. Your area of expertise includes leadership issues such as mentoring„ team build¬ing, motivation, and empowerment. Over the past year, employee turnover has dr..

Important elements about the input : What are the most important elements about the Input, SWOT, and Outputs for that (those) strategies? Do these conclusions make sense for your study habits, and how will you implement what you have learned here?

User Account

All Pages