Draw an influence diagram for the given problem

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Reference no: EM131931752

Question

Draw an influence diagram for the following problem: Hatton's mail order company is planning to install a new computer system next year. Two possible systems are being considered:

The Gamma II and the Elite. The Gamma II will mean that the company incur higher initial costs than the Elite, but the total costs associated with the chosen system over its life time will also depend on whether the company decides to expand the computer system at some future date (the Gamma II system would cost less to expand).

The expansion decision will be in?uenced by the level of sales achieved by the company over the next 3 years, while the level of sales will, in turn, be influenced by the size of the market and the amount of competition which Hatton's has to face.

It is thought that the size of the market will itself be in?uenced by the performance of the economy (e.g. a continued recession would depress the market).

It is also thought that if the recession continues a number of rivals will go out of business so the severity of competition will be less.

Reference no: EM131931752

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