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 if overachievement is acceptable, If overachievement is acceptable,...

If overachievement is acceptable, the appropriate di+ variable can be dropped from the objective function.

Do you think taylor''s position is similler applicable today, 1. Do you thi...

1. Do you think Taylor's position is equally applicable today? 2. Looking at Taylor's and Grayson's remarks, whick were made approximately 73 years apart, one has to wonder what

Explain what should morgantown''s promotional objectives be, How might you ...

How might you describe furniture buying using the purchase decision process described in Chapter 5? How might each of the elements of the promotional program influence each stag

Determine control limits for a c-chart and np-chart, 1. If, instead, a cons...

1. If, instead, a constant sample size of 100 is chosen, determine the np-chart control limits. A later sample produces 15 defectives: what conclusion can be drawn?  2. 1000 bot

Describe educational and training, How the organization might adopt a techn...

How the organization might adopt a technology trend to improve the quality of the health care delivered to organization members. The board wants to know what are the "Educational a

Explain what the best collaboration tools, For firms that have multiple loc...

For firms that have multiple locations that would like their professionals from different teams to be able to collaborate efficiently, how would you determine what the best collabo

Increased involvement in the colonies use examples, As mentioned in the att...

As mentioned in the attached reading on Revolutionary radicalism, the colonial response to British laws following the French and Indian War was extremely violent in many cases. Ma

Identify five major economic variables, Identify five key economic variable...

Identify five key economic variables that could represent major opportunities or threats to a bank in your town or city. Identify which that you believe to be most important, and d

Explain what is the total cost of this policy, Rocky Mountain Tire Center s...

Rocky Mountain Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. Th

Combination layout, Discuss the concept of combination layout

Discuss the concept of combination 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