Reference no: EM132945828
Vasco da Gama Industries is deciding whether to make or outsource the new batteries that will power its new Hydro Bat-Boat. Guy Josobo is the CEO, and he runs all the production management for the project. He has determined the following costs: Respectively the amounts are $-20,000 (lose money) low, $40,000 medium, and $100,000 high demand to produce at Vasco da Gama. To outsource the project, he has determined the following costs: $10,000 low, $45,000 medium, and $70,000 high demand.
Using this information, complete the following steps:
-Develop a decision tree or decision-tree chart to solve Guy Josobo's dilemma.
-At each decision node, select the best decision alternative for both the manufacture and outsource choices.
-Determine the state of probabilities for all the demands: low demand is .30, medium demand is .45, and high demand is .25.
-Using your decision tree and states of probabilities, calculate the cost at each outcome node, and determine the best solution.
-Show all your work for these steps.
-Describe and justify the steps in a decision tree analysis that Guy Josobo performed for Vasco da Gama Industries, and include any possible challenges he will face.
-Explain what decision Guy Josobo should make, and explain your reasoning.