Analyze the bank loan using decision tree

Assignment Help Operation Management

Reference no: EM131176152

Patrick O’Doyle asked his bank for a loan to expand his company. The bank managers have to decide whether or not to grant the loan. If they grant the loan, Patrick’s expansion may be successful or it may be unsuccessful. If the bank managers do not grant the loan, Patrick may continue banking as before, of he may move his account to another bank.

Suppose that Patrick O’Doyle’s bank currently values his business at $20,000 a year. If the manager grants the loan and the expansion succeeds, the value to the bank of increased business and interest charges is $30,000 a year. If the expansion does not succeed, the value to the bank declines to $10,000, because of lower volumes and an allowance writing-off bad debt. There is a probability of 0.7 that the expansion plan will succeed. If the manager does not grant the loan, there is a probability of 0.6 that Patrick will transfer his account to another bank.

Analyze the Patrick O’Doyle’s bank loan using a decision tree.

Reference no: EM131176152

Questions Cloud

What are the common stereotypes about hispanics : What values that tend to be strong in Hispanic cultures, contribute to popular stereotypes about Hispanic workers? How could these values contribute to a perception that Hispanics lack the initiative and drive so valued in today’s workplace? What are..

What are the advantages of conducting an effective analysis : What are the steps involved with a job analysis? What are the advantages of conducting an effective analysis? What are some potential pitfalls that can occur?

Why is it important for marketers to use geographic pricing : What type of geographic pricing policy is most appropriate for the following products. Why is it important for marketers to use geographic pricing? Are there any other forms of pricing, please discuss those as well.

Identify the different types of salespeople : Describe and discuss what a salesperson is and identify the different types of salespeople. Pick 3 different products and talk about how they get from manufacture to customer and the different selling jobs in the channel for each product, indicate th..

Analyze the bank loan using decision tree : Patrick O’Doyle asked his bank for a loan to expand his company. The bank managers have to decide whether or not to grant the loan. If they grant the loan, Patrick’s expansion may be successful or it may be unsuccessful. Analyze the Patrick O’Doyle’s..

What is the importance of biomedical research : In the United States, biomedical research is taken into serious consideration regarding health care. However, in most instances, the result of biomedical research takes decades to translate onto the clinical setting and is a very costly initiative. W..

Project schedule has been determined : As the project manager, you have made all of the role assignments, and the project schedule has been determined. One prominent stakeholder, Mr. Money, had asked for and was assigned a key role in the project—to secure donations for the project. What ..

Injured by a defective exploding airbag : A client comes into your office and tells you that she has been injured by a defective exploding airbag. Write a 1-2 page essay describing how you will to recover damages on behalf of the client. In addition give a list of defendants you will seek a ..

What is channel conflict : What is "channel conflict"? Describe two or more examples of actual channel conflicts between channel members in the same distribution channel and suggest ways that an organization might manage the situation to reduce or eliminate this conflict.

User Account

All Pages