Explain what is the best decision, Operation Management

Assignment Help:

Let's say you own a small construction company. You need to decide whether to buy a bulldozer to add to your equipment fleet. You assume that the construction industry could be Good, Mediocre, or Bad, and associate a dollar value for your profits with each possible state of the economy. Your profits will also depend on whether you buy the equipment as follows: *Buy the bulldozer and the economy is good should yield a profit of $120K. *Buy the bulldozer and the economy is mediocre should yield a profit of $80 K. *Buy the bulldozer and the economy is bad should yield a profit of -$50K. (That's negative!) *Don't buy the bulldozer and the economy is good should yield a profit of $100K using your other equipment. *Don't buy the bulldozer and the economy is mediocre should yield a profit of $75K using your other equipment. *Don't buy the bulldozer and the economy is bad should yield a profit of $60K using your other equipment. *The probability that there is a "good" economy is 20%. *The probability that there is a "mediocre" economy is 55%. *The probability that there is a "bad" economy is 25%. Q-2a: Draw the decision tree. Q-2b: What is the EMV associated with the decision to buy the bulldozer? Q-2c: What is the EMV associated with the decision not to buy the bulldozer? Q-2d: What is the best decision?


Related Discussions:- Explain what is the best decision

Explain traits are required for a coach of a cricket team, Explain importa...

Explain important traits are required for a coach of a cricket team. The three important traits needed for a coach of a cricket team are:- (i) Decisiveness - The coach is c

Define how create a positive climate within the organization, An organizati...

An organization's culture can be a debilitating impediment to the development and implementation of its strategic plan. Discuss the role of culture along with specific strategies

Explain process-improvement efforts, Until the start of the 1980s, most U.S...

Until the start of the 1980s, most U.S. companies focused on maintaining quality levels by utilizing which of the following practices? Process-improvement efforts Design-qual

Define constraint its associated binary decision variables, Consider the fo...

Consider the following constraint and its associated binary decision variables: XA + XB + XC = 2. This constraint is an example of a mutually exclusive constraint.

Line balancing, Line Balancing Line balancing is arranging a production ...

Line Balancing Line balancing is arranging a production line so that there is an even flow of production from one work station to the next i, e, so that there are no delays at a

How technology is creating employer or employee rights, Give some examples ...

Give some examples of how technology is creating employer/employee rights and policy issues. Then suggest some possible actions that may be needed

Why analysis phase in an hpt project is the most important, Some HPT practi...

Some HPT practicioners believe that the analysis phase in an HPT project is the most important. Do you agree? Why?

Is work measurement used in organisation - process design, Is work measurem...

Is work measurement used in Organisation - Process Design Is work measurement used in your own organisation? If not, then give thought to how: alternative methods are compared

What are hr as a competitive advantage, Hr as a competitive advantage: I ne...

Hr as a competitive advantage: I need research on the above subject with reference and cited.

Explain how can mexico production help us, How can Mexico production help U...

How can Mexico production help US manufacturers bring back some/most? of their Asia offshoring activities?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd