Draw a decision tree showing the decisions and chance events

Assignment Help Operation Management
Reference no: EM1381250

Spectrum Hair Salon is considering expanding its business, as it is experiencing a large growth. The question is whether it should expand with a bigger facility than needed, hoping that demand will catch up, or with a small facility, knowing that it will need to reconsider expanding in three years. The management at Spectrum has estimated the following chances for demand:

•the likelihood of demand being high is 0.70;

•the likelihood of demand being low is 0.30.

Estimated profits for each alternative are as follows:

•large expansion has an estimated profitability of either $100,000 or $70,000, depending on whether demand turns out to be high or low;

•small expansion has a profitability of $50,000, assuming that demand is low;

•small expansion with an occurrence of high demand would require considering whether to expand further. If the business expands at this point, the profitability is expected to be $90,000. If it does not expand further, the profitability is expected to be $60,000.

Draw a decision tree showing the decisions, chance events, and their probabilities, as well as the profitability of outcomes, and solve the decision tree

EVsmall expansion = $, EVlarge expansion = $

Reference no: EM1381250

Managed care practices can threaten physician autonomy

Which of the following managed care practices can threaten physician autonomy? Which of the following principles would best support the Plan Tree Model of patient-centered car

Contemplating bidding on request for proposal

Supplier Bids: You company is contemplating bidding on an RFP (Request for Proposal) for 100,000 units of a specialized part. Why might the amount be more than the requestingc

Describe the advantages of using a diagnostic model

That teaches one or more of the diagnostic models from chapter 5 to a group of students. Select one or more of the diagnostic models that you believe provides a framework for

Which selection decision making model

Which selection decision making model is most appropriate for each of the following jobs: a. Elementary school teacher b. Secretary c. Manufacturing plant manager d. Accountan

What barries does hrm continue to face today

HRM has transitioned over the last couple of decades from back office support to strategic partner.Review some major trends that have impacted HRM over the last twenty year

Evaluate the projected cost and time savings

Evaluate three pros and three cons of e-prescribing. Summarize the e-prescription standards as described by the National Council for Prescription Drug Programs. Evaluate the p

What is the average multifactor productivity

The weekly output of a fabrication process is shown below together with data for labor and material inputs. Standard selling price is $125 per unit. Overhead is charged weekly

Do the nonverbal communication behavior differences

How would you describe your relationship with the other person? What role does nonverbal communication play in the type relationship you chose? Be specific. Do the nonverbal c


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