Reference no: EM131260582
F. J. Brewerton Retailers, Inc., must decide whether to build a small or a large facility at a new location in Omaha. Demand at the location will either be low or high, with probabilities 0.4 and 0.6, respectively. If Brewerton builds a small facility and demand proves to be high, he then has the option of expanding the facility.
If a small facility is built and demand proves to be high, and then the retailer expands the facility, the payoff is $270,000. If a small facility is built and demand proves to be high, but Brewerton then decides not to expand the facility, the payoff is $223,000. If a small facility is built and demand proves to be low, then there is no option to expand and the payoff is $200,000. If a large facility is built and demand proves to be low, Brewerton then has the option of stimulating demand through local advertising.
If he does not exercise this option, then the payoff is $40,000. If he does exercise the advertising option, then the response to advertising will either be modest or sizable, with probabilities of 0.3 and 0.7, respectively. If the response is modest, the payoff is $20,000. If it is sizable, the payoff is $220,000. Finally, if a large facility is built and demand proves to be high, then no advertising is needed and the payoff is $800,000.
a) What should Brewerton do to maximize his expected payoff ?
b) What is the value of this expected payoff ?
Develop a decision tree for jonatan
: Jonatan Jelen is considering opening a bicycle shop in New York City. - The results of such a study could be either favorable or unfavorable. Develop a decision tree for Jonatan.
|
Research paper of approximately five
: Prepare a short research paper of approximately five (5) pages, double-spaced, exclusive of cover, title page, table of contents, endnotes and bibliography. Your paper must use APA formatting with the exception that tables and figures can be inse..
|
What is the difference between computer hardware and softwar
: What is the difference between computer hardware and software? Why is the use of information systems in health care important? Explain your answer.
|
Construct a bond graph model of the system
: Consider the system from Problem 12-5. Neglect thermal capacitance of the piston walls but include leakage past the piston to the atmosphere. Using one thermodynamic accumulator and one 4-port isentropic nozzle, construct a bond graph model of the..
|
What should brewerton do to maximize his expected payoff
: If he does not exercise this option, then the payoff is $40,000. - What should Brewerton do to maximize his expected payoff? - What is the value of this expected payoff?
|
What are the main components of a database
: What are the main components of a database? Based on Part A of this assignment, explain how relational data is used? Explain why the use of databases is important in health care.
|
Examine the various techniques
: There are many techniques that are used to harden a system. Examine the various techniques that are used and select two that you would recommend being used in your organization and two that you would not recommend. Provide a rationale for your res..
|
Hope limit and next header of a ipv6 header
: What is the length of hope limit and Next Header of a ipv6 header?
|
What is advice to musa
: Philip Musa can build either a large electronics section or a small one in his Birmingham drugstore. - What is your advice to Musa?
|