The last technique we are going to learn and apply in your project is capacity analysis. We are going to use decision trees for the determination of capacity Please read in detail section 5S.7 on decision trees from the textbook under the Supplement to Chapter Five and read the Session 6: Capacity Management using Decision Trees.

Class Exercise

Create a simple decision tree for your project comparing three different alternatives. You are welcome to use the same template from the exercise posted on the lecture about capacity planning. You don't have to change any formulas or create a new graphical display. Just determine the following:

Explore three different alternatives or courses of action for your project. These are examples:

High, medium, and lower demand

High, medium, and lower volume of capacity (three different sizes)

Serving Markets A, B, or C and their different requirements (pick one requirement)

Product or Services A, B, or C (different models).

Two scenarios (one is positive versus a negative counterpart) per alternative and their outcomes (cost or profits). Gather preliminary information or make educated assumptions for outcomes.

Assign probabilities for each scenario similar to the two templates posted on the Capacity Management page.