Analyze using a tree diagram

Assignment Help Operation Management
Reference no: EM131147700

A firm that plans to expand its product line must decide whether to build a small or large facility to produce the new products. If it builds a small facility and demand is lower, the net present value after deducting for building costs will be $400,000. If demand is high, the firm can either maintain the small facility or expand it. Expansion would have a net present valueof $450,000, and maintaining the small facility would have a net present value of $50,000. If a large facility is built and demand is high, the estimated net present value is $800,000. If demand turns out to be low, the net present value will be -$10,000. The probability that demand is high is estimated to be 0.60, and the probability of low demand is estimated to be 0.40.

a. Analyze using a tree diagram.

b. Compute the EVPI. How could this information be used?

c. Determine the range over which each alternative would be best in terms of the value of P (demand low).

Reference no: EM131147700

Pre-conventional morality and conventional morality

What are the differences between pre-conventional morality, conventional morality, and post-conventional morality? Give an example of each. Describe at least three situations

Schedule for introducing new product into the marketplace

You just have been instructed to develop a schedule for introducing a new product into the marketplace. Below are the elements that must appear in your schedule. Arrange these

Care business partner training program

Describe how you would incorporate adult learning principles and methods of experiential learning from this course into the Maersk Customer Service – CARE Business Partner tra

Make the same mistakes when planning for venture financing

Over and over again, entrepreneurs make the same mistakes when planning for venture financing. Experienced investors are alert for the pitfalls. Identify three financing pitfa

About the quantity and quality

QUANTITY: How long/ short do these lists come out as? What does this say about the relative significance these “things” have for us? QUALITY: How positive/ negative are the wo

Will their marketing strategy support their drive for growth

Cisco has been a world-class leader in networking equipment for the IT industry for many years.In the past 10 years they have become one of the industry leaders in company acq

The expense involved in developing the initial molds

You are considering the possibility of starting a company to produce sailboats. Because of the expense involved in developing the initial molds and acquiring the necessary equ

Relevant law-refer to the corporations act

You are a director and member of a long established company. There are five members in your company and each member has 20% ownership in the company. The board, of which you a


Write a Review

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