Compute the expected value of each given alternative

Assignment Help Business Management

Reference no: EM131282487

Business Policy & strategic Solutions/REY Writer

Assignment 2: Probability Analysis

A General Manger of Harley-Davidson has to decide on the size of a new facility. The GM has narrowed the choices to two: large facility or small facility. The company has collected information on the payoffs. It now has to decide which option is the best using probability analysis, the decision tree model, and expected monetary value.

Options:

Facility	Demand Options	Probability	Actions	Expected Payoffs
Large	Low Demand	0.4	Do Nothing	($10)
	Low Demand	0.4	Reduce Prices	$50
	High Demand	0.6		$70
Small	Low Demand	0.4		$40
	High Demand	0.6	Do Nothing	$40
	High Demand	0.6	Overtime	$50
	High Demand	0.6	Expand	$55

Determination of chance probability and respective payoffs:

Build Small:
Low Demand	0.4($40)=$16
High Demand	0.6($55)=$33
Build Large:
Low Demand	0.4($50)=$20
High Demand	0.6($70)=$42

Determination of Expected Value of each alternative

Build Small: $16+$33=$49

Build Large: $20+$42=$62
The Statistical Terms review sheet.
Submit your conclusion in a Word document

Reference no: EM131282487

Questions Cloud

Effective management of operations : In this module, you learned about the components involved in the effective management of operations. You will use your focus company to help you complete this assessment. Details on the focus area for each assessment that utilizes this company can..

What would the risetime of the amplifier output be : The upper cutoff frequency of an amplifier is 100 kHz. If it is square-wave tested, what would the risetime of the amplifier output be?

Two candidate modulation schemes : Show that PPM is the only one of the two that can produce an orthogonal set of signals over the interval 0 £ t £ T.

Prepare a survey report on child development : Prepare a survey report on child development.

Compute the expected value of each given alternative : A General Manger of Harley-Davidson has to decide on the size of a new facility. Determination of Expected Value of each alternative. Determination of chance probability and respective payoffs.

What does any diff amp or op amp need to work properly : What does the output voltage equal? Based on your preceding answer, what does any diff amp or op amp need to work properly?

Positive impacts of business intelligence : What are the positive impacts of business intelligence? What are the negative impacts? How does a database and data warehouse support business intelligence?

Construct signal constellation for the biorthogonal signal : Construct the signal constellation for the biorthogonal signals corresponding to the pair of orthogonal signals shown in given Figure.

Develop a precedence notation : Using the information given in figures shown, develop a precedence notation CPM network for the bridge project described. Certain logical relationships are implied by the bar chart that has been supplied to you by the field superintendent who has ..

User Account

All Pages