How much could the payoff under strong demand increase

Assignment Help Operation Management

Reference no: EM131900071

For the Pittsburgh Development Corporation problem in Section 13.3, the decision alternative to build the large condominium complex was found to be optimal using the expected value approach.

In Section 13.4 we conducted a sensitivity analysis for the payoffs associated with this decision alternative.

We found that the large complex remained optimal as long as the payoff for the strong demand was greater than or equal to $17.5 million and as long as the payoff for the weak demand was greater than or equal to 2$19 million.

a. Consider the medium complex decision. How much could the payoff under strong demand increase and still keep decision alternative d3 the optimal solution?

b. Consider the small complex decision. How much could the payoff under strong demand increase and still keep decision alternative d3 the optimal solution?

Reference no: EM131900071

Questions Cloud

What is meant by the marshall-lerner condition : What is meant by the Marshall-Lerner condition? How does a currency depreciation affect a nation's balance of trade?

What actions can you take to continue the improvement : You have a dilemma in your hands. On one hand, you recognize the importance of good communications.

What are the benefits of purchasing convertible bonds : What are the benefits of purchasing convertible bonds? How does the pricing of a convertible bond move in relation to interest rates and the firm's stock price?

What effects does labor migration have on the country : What effects does labor migration have on the country of immigration? The country of emigration? The world as a whole?

How much could the payoff under strong demand increase : Consider the medium complex decision. How much could the payoff under strong demand increase and still keep decision alternative d3 the optimal solution?

What is meant by the term multinational enterprise : What is meant by the term multinational enterprise? What are the most important motives behind an enterprise's decision to undertake foreign direct investment?

What is liquidity premium on seven-year treasury security : According to the liquidity premium hypotheses, what is the liquidity premium on the 7-year Treasury security, L7?

Of the four primary management functions organizing : One of the advantages of an MBO program is that it continually emphasizes what should be done in order for the organization to reach its goals.

What are the major foreign industries : What are the major foreign industries in which U.S. businesses have chosen to place direct investments?

User Account

All Pages