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 operations information systems, Distinguish between management info...

Distinguish between management information systems and operations information systems

Job shop organisation - operations function, Job Shop Organisation - Operat...

Job Shop Organisation - Operations Function Job shop systems generate special products or services to customer specification, with little likelihood that any particular produc

Difference between performance and productivity measurement, 1. Explain the...

1. Explain the link between productivity and quality?  2. Who do van Biema and Greenwald (1997) and Drucker (1991) suggest are responsible for the slow growth in service sector

Upper Control limit, Twenty-five samples of size thirty (30) were collected...

Twenty-five samples of size thirty (30) were collected and a total of 48 nonconforming items were found yielding p-bar = 0.064. The three sigma upper control limit (UCL) for a p co

Why jobs needed to produce the shopping carts, A company that makes shoppin...

A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labour content of the jobs needed to produce the shoppi

Discuss the relationship between companies and profit motive, Discuss the r...

Discuss the relationship between these four features of capitalism. Companies, profit motive, competition and private property.

Explain factors in the operating environment, The model below depicts indus...

The model below depicts industry analysis and a funnel that focuses on remote factor analysis to better understand the impact of factors in Aubrey environment you find the small sa

Explain the steps involved in conducting a risk, Describe the steps involve...

Describe the steps involved in conducting a risk and opportunity assessment.

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