Generate a decision tree to help expando, Operation Management

Assignment Help:

Expando, Inc., is considering the possibility of building an additional factory that would produce a new addition to its product line. The company is currently considering two options. The first is a small facility that it could build at a cost of $6 million. If demand for new products is low, the company expects to receive $10 million in discounted revenues (present value of future revenues) with the small facility. On the other hand, if demand is high, it expects $12 million in discounted revenues using the small facility. The second option is to build a large factory at a cost of $9 million. Were demand to be low, the company would expect $10 million in discounts revenues with the large plant. If demand is high the company estimates that the discounted revenues would be $14 million. In either case, the probability of demand being high is .40, and the probability of it being low is .60. Not constructing a new factory would result in no additional revenue being generated because the current factories cannot produce these new products. Construct a decision tree to help Expando make the best decision.


Related Discussions:- Generate a decision tree to help expando

Explain factors that are likely to create dramatic turns, Look into the fut...

Look into the future. Consider trends in society, technology, economics, environmentalism, and politics that can influence the future of W. L. Gore & Associates (Case 24) and Googl

Describe what would be the total number of workers, In the precedence chart...

In the precedence chart to the right, times are in seconds. 1 Assume that the plant runs one 7.5 hour shift per day and the assembly line is designed with 5 stations (one worker pe

Explain the employers responsibility, Describe the employers responsibility...

Describe the employers responsibility, giving at least three examples. Be sure to use a credible academic/professional source and include the link in your summary.

Explain asset has negative risk, Suppose rf is 5% and rM is 10%. According ...

Suppose rf is 5% and rM is 10%. According to the SML and the CAPM, an asset with a beta of -2.0 has a required return of negative 5% [= 5 - 2(10 - 5)]. Can this be possible? Does t

Practice Question.., 4. (32 points) You and your roommate are planning to o...

4. (32 points) You and your roommate are planning to open “Pizza In The Dorm” to make and distribute fresh pizza from your dorm room. You plan to provide 100% fresh, high quality p

Explain appropriate technique to develop a forecast, Air travel on Mountain...

Air travel on Mountain Airlines for the past 18 weeks was: Week Passengers Week Passengers 1 406 10 440 2 410 11 446 3 420 12 451 4 415 13 455 5 412 14 464 6 420 15 466 7 424 16 47

Concept of trade off in business strategy, Concept of Trade off in Business...

Concept of Trade off in Business Strategy The trade-off concept was first introduced by Skinner (1969,1974) who carried out a large study of successful American manufacturing

Types of operations systems - variations in demand, Types of Operations Sys...

Types of Operations Systems - Variations in Demand Make-to-order versus make-for-stock  Particularly in production systems, a key decision must be made as to whether o

Group layout, Can I know what is group layout

Can I know what is group layout

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd