Construct a spreadsheet model with decision tree

Assignment Help Management Theories

Reference no: EM131973689

Quantitative Management Practice Assessment -

Scenario - You are to undertake a study to find out whether the company Clean & Brite needs to market a new brand of toothpaste.

Case Study - A product manager at Clean & Brite (C&B) wants to determine whether her company should market a new brand of toothpaste. If this new product succeeds in the marketplace, C&B estimates that it could earn $1,800,000 in future profits from the sale of the new toothpaste. If this new product fails, however, the company expects that it could lose approximately $750,000. If C&B chooses not to market this new brand, the product manager believes that there would be little, if any, impact on the profits earned through sales of C&B's other products. The manager has estimated that the new toothpaste brand will succeed with probability p = 0.35. Before making her decision regarding this toothpaste product, the manager can spend $130,000 on a market research study. Based on similar studies with past products, C&B believes that the study will predict a successful product, given that the product would actually be a success, with probability 0.8. It also believes that the study will predict a failure, given that the product would actually be a failure, with probability 0.7

a. To maximise expected profit, what strategy should the C&B product manager follow?

b. Calculate and interpret EVI for this decision problem with p = 0.35. Then use a data table to find EVI for p from 0.05 to 0.70 in increments of 0.05, and chart EVI versus p.

c. Using the analysis from part b, find the EVSI when p = 0.15. T

d. Calculate and interpret the EVPI when p = 0.35.

ASSIGNMENT TASKS -

Construct a spreadsheet model with decision tree.

Develop a solution for C&B, and write your recommendation in the form of a report.

Attachment:- Assignment Files.rar

Reference no: EM131973689

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len1973689

5/7/2018 5:48:28 AM

The input and output cells are set-out efficiently. Data is correct and appropriately referenced. The optimal solutions are correct and can be read easily from the spreadsheet. Professional page setting out. Consistent with the text type/size and proper formatting. Sentences are complete and grammatically correct. Excellent flow of information. Appropriately referenced. No errors. All elements of the report are present and completed to an exceptionally high standard. Accurate and complete answers to the questions posed.

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