Decide on the size of the shopping mall

Assignment Help Operation Management

Reference no: EM131133535

A construction company must decide on the size of the shopping mall, i.e. Large, Medium or Small, that has to be constructed in their acquired plot in the sub-urban area of Seattle. Due to the market conditions, the number of visitors to the mall will be High, Moderate, or Low. The level of response and the size of the mall will decide the return of investment from the mall. The profit payoff table for management (in millions of dollars) after 5 years is provided below. Number of visitors Size of the mall High Moderate Low Large 25 15 –20 Medium 20 12 –10 Small 15 13 5 The probabilities are P(High) = 0.35, P(Moderate) = 0.40, and P(Low) = 0.25. a. Use a decision tree to recommend a decision. Use EVPI to determine whether the construction company should attempt to obtain a better estimate of the response

Reference no: EM131133535

Questions Cloud

Monsanto engages in poor ethical behavior : Every business wants to earn a profit as we have often discussed. At what point, however, does corporate lobbying mean that that a company like Monsanto engages in poor ethical behavior?

Switching costs and lock in its customers and suppliers : How could a business use information technology to increase switching costs and lock in its customers and suppliers? Use business examples to support your answers.

The dark act or deny americans the right to know act : Consider the bill proposed about GMO labelling by Kansas Representative Mike Pompeo last summer and supported by three St. Louis area Congressmen that would not require companies to disclose whether the product was based on GMO seeds. (See article) M..

What is the recommended decision without perfect information : Meega airlines decided to offer direct service from Akron to Clearwater beach, Florida. Management must decide between full-price service using a company’s new fleet of jet aircraft and a discount-service using smaller capacity commuter planes. Using..

Decide on the size of the shopping mall : A construction company must decide on the size of the shopping mall, i.e. Large, Medium or Small, that has to be constructed in their acquired plot in the sub-urban area of Seattle. Due to the market conditions, the number of visitors to the mall wil..

Effected societal beliefs about different ethnic groups : How has eugenics effected societal beliefs about different ethnic groups? What allowed for the rise of the Third Reich in Germany? In general, discuss one interesting fact you learned this week.

About right to recover the price of the goods : Jack and Jill, 2 merchants, were discussing business over lunch when they agreed on the sale of some goods. Neither of them had any paper, so Jack wrote the following on a napkin: What do you infer about Jack’s right to recover the price of the goods..

Buyer purchased home theater system : Buyer purchased a home theater system for $20,000 from Top Buy, Inc. As part of the written sales contract, Top Buy agreed to install the system for an additional $2,000. After the system was installed and Buyer began using it, the system developed p..

Possibly recover damages for his injuries : Jason, an experienced snowboarder, purchased a new snowboard from Hot Sports, Inc., a sporting goods store. Fast Boards Co manufactured the snowboard. Jason went to Hills Resort to try out his new snowboard. Determine which of the following illustrat..

User Account

All Pages