Generate a decision tree to help expando, Operation Management

Assignment Help:

Expando, Inc., is considering the possibility of building an additional factory that would produce a new addition to its product line. The company is currently considering two options. The first is a small facility that it could build at a cost of $6 million. If demand for new products is low, the company expects to receive $10 million in discounted revenues (present value of future revenues) with the small facility. On the other hand, if demand is high, it expects $12 million in discounted revenues using the small facility. The second option is to build a large factory at a cost of $9 million. Were demand to be low, the company would expect $10 million in discounts revenues with the large plant. If demand is high the company estimates that the discounted revenues would be $14 million. In either case, the probability of demand being high is .40, and the probability of it being low is .60. Not constructing a new factory would result in no additional revenue being generated because the current factories cannot produce these new products. Construct a decision tree to help Expando make the best decision.


Related Discussions:- Generate a decision tree to help expando

Explain six sigma principles to health care organizations, Type two savings...

Type two savings are the least likely to occur when applying Six Sigma principles to health care organizations

Explain what is the present value of the following annuities, What is the p...

What is the present value of the following annuities? a. $2,500 a year for 10 years discounted back to the present at 7% b. $70 a year for 3 years discounted back to the pres

Need supply and chain term paper, I am in need of a couple of suggestions f...

I am in need of a couple of suggestions for a Supply and Chain term paper. I was thinking about "Money" Any help will be highly appreciate it.

How business leadership accomplishing company objectives, Provide two examp...

Provide two examples of current leaders and describe how they demonstrate their leadership characteristics. What separates these characteristics from management techniques? How eff

Layout strategy, Discuss the strategic importance of layout decisions.

Discuss the strategic importance of layout decisions.

Operations function in an organisation - method study, Operations Function ...

Operations Function in an Organisation - Method Study  A procedure that has stood the test of time in the study of work entails six steps (often referred to by the acronym, SR

Business organisation functions, ''OPERATIONS MANAGEMENT IS THE CENTRAL TO ...

''OPERATIONS MANAGEMENT IS THE CENTRAL TO THE FUNCTIONING OF ALL BUSINESS ORGANISATIONS''.with reference to the organisation of your choice discuss this statement highlighting how

Leadership evaluation and leadership philosophy, Write an evaluation (500-7...

Write an evaluation (500-750 words) of the situation that addresses the following: The power bases used by the leader. The influence tactics used by the leader. The leadership sty

Explain levels of management by management skills, Explain levels of Manage...

Explain levels of Management by Management Skills. Management Skills needed successful manager, be categorized as given below: Technical skill refers to the pro

Line balancing, What do you understand by “line balancing”? What happens if...

What do you understand by “line balancing”? What happens if balance doesn’t exist

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