The Prescott Furniture Company

Instructions:

Using Palisades Precision Tree software create a tree that graphically shows the various options open to customers of the Prescott Furniture Company . You must import your Precision Tree into a Word document that contains the NSU/SBE front page. Be sure to explain what you did to solve this problem, and explain what a decision tree is and what the solution is for each of the various branches. There is a maximum of 10 points available for this opportunity.

The Problem

Walt (Hutch) Woods is the owner and main furniture maker at the Prescott Furniture Company (located just behind the K-Mart on route 52) in Prescott Florida. The company has been in business for over 15 years producing some of the finest examples of curio cabinets available in the Southeast US. Hutch makes two sizes of cabinets; the regular size is about 10 inches smaller in width than the large size cabinet seen on the right.

The company uses only three types of woods, Miami Dade Pine, pecan, and red cherry to make their cabinets. The Miami Dade Pine is only finished in natural wood, but the pecan and red cherry woods can be finished in either a matte finish or a glossy finish which both cost the same.

Walt (Little Hutch) Woods

Walt's son, Little Hutch, is a senior at Prescott High School where he has been taking as many business courses and wood working classes as he can. Because he is planning on graduating at the end of this semester, his dad hopes that he will continue his studies at PC and work part-time at his furniture shop. In order to help Little Hutch out he has asked you to create a decision-tree that explains the various options open to customers. Over the past years Walt has been keeping track of the preferences that his customers make when ordering a cabinet, and he has provided you with a table that shows the percentages and costs of each item for you to use in your decision tree.
 

Your task

You are to take this information and beginning with a purchase/don't purchase decision node create a Precision Tree that shows Little Hutch the possible options open to the customer, and find the final ending price for each option.

NOTE: You must also include the state of Florida sales tax and Prescott County sales tax cost. Together they total 7.25% of the total sale. You may have to calculate this by hand in your decision tree.

The Furniture Options

The following are the options open to customers of the company. Prepare a Precision Tree graphically showing these options, percentages and costs. Import this tree into a Word document and explain your answers in the Word document.

Prescott Furniture Company - Cabinet Options Chart

Type of Wood
Finish - Natural
Finish - Matte
Finish Glossy % of people selecting this option Cost of Cabinet with this option
Miami Dade Pine
Small Cabinet X 8% $4,500
Large Cabinet X 14% $5,250
Pecan
Small Cabinet X X 17% $3,500
Large Cabinet X X 20% $3,750
Cherry Wood
Small Cabinet X X 20% $2,000
Large Cabinet X X 21% $2,500

Be sure to also include the following table in your finished work project.

• Assume that Walt will have 135 customers in the coming year, and that each one will order one of the above cabinets in the same percentage indicated, how much is his expected income (gross) and how much will he pay in state and local sales taxes?

Table 1. Estimated Income

Type of Wood Estimated Income Estimated Sales Tax Total Income
Miami Dade Pine
Pecan
Cherry Wood