Create decision tree for hyperware tool and die

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Reference no: EM131040021

Hyperware Tool & Die manufactures parts for an electric motor. Lately their customer has discovered that one of the pieces develops stress fractures during use. Hyperware has several options for how to fix this. They can change the alloy used for the part, which gives them two alloy possibilities. Their engineers estimate that the chances of success are 65% if they change the alloy. The other possibility is that they could change the design of the part, which provides two design possibilities. Their engineers estimate that either one presents a 95% chance of fixing the problem. However, this will require changes to the production process and will be more expensive. Using the information below, create a decision tree for Hyperware Tool & Die and compute the expected value for each change. How should Hyperware respond to the stress fractures?

Approaches:

Change alloy Success (0.65) Failure (0.35)

Alloy A -$6,340 -$26,545

Alloy B -$7,450 -$23,500

Redesign part Success (0.95) Failure (0.05)

Design A -$10,550 -$35,950

Design B -$12,680 -$32,100

Please give me answer with calculations.. i do not need a diagram...i need proper calculations and answer to the stress fracture questions.

Reference no: EM131040021

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