Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Operation Management Expert

Problem: RDF, Inc., a smart tag manufacturer, is investigating the probability of producing and marketing the new RFID tag. Undertaking this project will necessitate either purchasing a sophisticated IT system or hiring and training several additional engineers. The market for the product could be either favourable or unfavourable. RDF, Inc., of course, has the option of not developing new product at all.

With favourable acceptance by market, sales would be 25,000 tags selling for $100 each. With unfavourable acceptance, sales would be only 8,000 tags selling for $100 each. The cost of IT equipment is $500,000, but that of hiring and training three new engineers is only $375,000. However, manufacturing costs should drop from $50 each with manufacturing devoid of the IT system, to $40 each when manufacturing with IT. The probability of favourable acceptance of new smart tag is 0.40; the possibility of unfavourable acceptance is 0.60.

Draw a decision tree. Then analyze it to find out the expected payoff for each decision and event node. Which alternative (buying the IT system, hiring engineers) has the good expected payoff?

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M94315
  • Price:- $30

Guranteed 24 Hours Delivery, In Price:- $30

Have any Question? 


Related Questions in Operation Management

If brown falsely accuses smith over the telephone of having

If Brown falsely accuses Smith over the telephone of having raped a minor, which of the following will cause the statement to be defamatory: 1) the statement is made within the hearing of a third party 2) the defamatory ...

In this module there will be continued investigation into

In this module, there will be continued investigation into the tools, techniques, and theories that underlie operations management. This module introduces the idea of “quality” and offers a holistic perspective regarding ...

How do you use critical thinking in decision making and

How do you use critical thinking in decision making and problem solving in your professional life? What are the three most important elements of personal and professional etiquette that you employ in your professional li ...

Discuss the challenges associated with penetrating emerging

Discuss the challenges associated with penetrating emerging markets. What are some of the barriers related to infrastructure, quality, risk and cultural dimensions that need to be investigated? How can you effectively ov ...

Assuming activity is within relevant range if there is a

Assuming activity is within relevant range, if there is a change in the activity level: 1) Fixed and variable cost per unit will change, 2) fixed and variable cost per unit wil remain the same ,   3) Fixed cost per unit ...

A small service company is concerned about the amount of

A small service company is concerned about the amount of time it takes to complete a particular service. The manager has observed that this particular service is causing delays and customer dissatisfaction. The service w ...

This forum is focused on the issue of the informal contract

This forum is focused on the issue of the informal contract that exists between employers and employees. Several decades ago, it was not uncommon for thereto be a large degree of loyalty between employers and employees. ...

Organizational management analyze the internal environment

Organizational management: Analyze the internal environment of the service industry and the impact on the management of people with specific reference to Westminster conference center.

1 is it ethical for companies to avoid certain segments for

1. Is it ethical for companies to avoid certain segments? For example, many brands do not target low-income consumers. Is that unethical? 2. Why is competitive intelligence so hot in today’s business environment? 3. Walg ...

Patricia meleen a chemical dependency counselor brought

Patricia Meleen, a chemical dependency counselor, brought charges alleging wrongful discharge, defamation, and emotional distress against the Hazelden Foundation, a chemical dependency clinic, in regard to her discharge ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate