Reference no: EM132168271

Jack Helprinite, chief engineer of Samonah Electronics, has to decide whether to build a new state-of-the-art processing facility. If the new facility works, the company can realize a profit of $200,000. If it fails, Abina Electronics could lose $180,000. At this time, Helprinite estimates a 60% chance that the new process will fail.

The other option is to build a pilot plant and then decide whether to build a complete facility. The pilot plant would cost $15,000 to build. Helprinite estimates a 50-50 chance that the pilot will work and not fail. If the pilot plant works, there is a 75% that the complete plant, if it is built, will work. If the pilot plant fails, there is only a 15% chance that the complete project (if constructed) will work. Helprinite faces a dilemma. Should he build the plant? Should he build the pilot project and then make a decision. Help Jack Helprinite by analyzing the problem.

?Develop a decision tree for this problem