A retailer must decide whether to build a small or large facilityat a new location. Demand at the location can be either low or high, with probabilities estimated to be 0.4 and 0.6 respectively. If a small facility is build and demand proves to be high, the manager may choose not to expand (payoff=$273000) or to expand (payoff=$250000). If a small facility is built and demand is low, there is no reason to expand and the payoff is $400000. If a large facility is built and demand proves to be low, the choice is to do nothing ($40000) or to stimulate demand through local advertising. The response to advertising may be either modest or sizable, with their probabilities estimated to be 0.3 and 0.7 respectively. If it is modest, the payoff is estimated to be only $20000. The payoff grows to $220000 if the response is sizable. Finally, if a large facility is built and demand turns out to be high, the payoff is $700,000. Draw a decision tree and analyze it to determine the expected payoff for each decision and event node. Which alternative has the higher expected payoff?Engineering & TechnologyIndustrial EngineeringOperations Management BBA MGT3202
solved : A retailer must decide whether to build a small or large fac
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assigned to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good gradesLET THE PROFESSIONALS WRITE YOUR PAPER!