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 accounting, Explain accounting. Accounting: It is an art of c...

Explain accounting. Accounting: It is an art of classifying and recording data. Now there data refers to transactions having monetary or financial values. As per to this, acc

Foreign direct investment in their countries, Describe some ways in which e...

Describe some ways in which emerging economies have benefited as a result of foreign direct investment in their countries by multinational enterprises. Multinational enterprise

Maintenance, discuss the pross and cons of hiring multi-craft maintenance p...

discuss the pross and cons of hiring multi-craft maintenance personnel

Explain graphically depict the interaction among its lunch, Big Bobs Burger...

Big Bobs Burger Barn would like to graphically depict the interaction among its lunch- ordering customers and its three employees. Customers come into the restaurant and eat there,

Explain what is the maximized profit, Riverside Oil Company in eastern Kent...

Riverside Oil Company in eastern Kentucky produces 3 different grades of gasoline. They are regular, premium, and supreme grades. Each barrel of regular grade sells for $82 while p

Explain null and alternative hypotheses to be tested, TRUE or FALSE. The Se...

TRUE or FALSE. The Sergio Lumber Company manufacturers plywood. One step in the process is the one where the veneer is dried by passing through a huge dryer (similar to an oven) wh

Explain the financial ratio analysis on harley davidson inc, What is the fi...

What is the financial ratio analysis on Harley Davidson Inc 2008?

Evolution of the supply chain, Evolution of the supply chain  Procurem...

Evolution of the supply chain  Procurement, materials management and logistics management activities can be combined by the integration of software packages such as ERP. For m

Explain is cloud computing the right direction, 1.) Why has Amazon.com succ...

1.) Why has Amazon.com succeeded online when so many other companies have failed? 2) Whats next for Amazon.com? Is cloud computing the right direction for the company? 3.) W

#title, Ask question #Mi.. Explain how the consideration of environmental a...

Ask question #Mi.. Explain how the consideration of environmental assesments AND ORGANISATION position provide a modeling framework for strategic planning of operations.

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