Use the decision tree analysis to calculate

Assignment Help Operation Management

Reference no: EM131375936

An oil company owns a lease on a potential prospect. can potentially drill two zones. Zone one is a shallow one and zone two is a deep one. of a well in zone one cost $70,000. The will probability of success is 0.4 and a successful well will result in Pv = $350,000. Drilling of zone two will cost $250,000. The probability of success is 0.2 and a successful well will result in PV of $2 million. Which option should the company choose? Draw the decision tree and use the decision tree analysis to calculate.

Reference no: EM131375936

Questions Cloud

Discuss the key risks to a health care organization : Discuss the key risks to a health care organization that fails to allocate sufficient support and resources to a newly implemented health care information system.

News in information systems technology : This is a hard one to find information about, is anyone up for the challenge? What's News in Information Systems Technology?

Explain challenges you encountered when completing report : The sooner you record an incident, the less likely you are to accidentally omit something important. If your report is written well and accurate, it is easier for others to understand and use to make more informed judgments and decisions. Familiar..

Enterprise systems consist of several : Enterprise systems consist of several carefully selected modules that are integrated together as a solution to ensure alignment and synchronisation of operational and business processes.

Use the decision tree analysis to calculate : An oil company owns a lease on a potential prospect. can potentially drill two zones. Zone one is a shallow one and zone two is a deep one. of a well in zone one cost $70,000. The will probability of success is 0.4 and a successful well will result i..

Project-organizational research and theory : 1. Describe how emotional intelligence and understanding personality types are important for developing relationships. 2. Examine the extent to which you believe that personality profiles can help to reduce workplace conflicts.

Purchase several energy generating facilities : As the owner of an independent firm, you are looking to invest within the energy sector. You would like to purchase several energy generating facilities, but you are unsure about the short-term and long-term benefits this may yield. Several utilit..

Give your opinion on apples product strategy should change : Based on the video, fast forward to current day and give your opinion on whether or not Apple's product strategy should change given its current rate of success and potential competing companies operating within their market.

With respect to corporate entrepreneurship : With respect to corporate entrepreneurship, sustained regeneration occurs when firms develop new culture, processes, or structures to support new product innovations.

User Account

All Pages