Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Operation Management Expert

You are considering the possibility of starting a company to produce sailboats. Because of the expense involved in developing the initial molds and acquiring the necessary equipment to produce the boats, you have decided to conduct a market study to make sure that the market for the boats will be adequate. You estimate that the market study will cost you $10,000. Furthermore, the market study can be either successful or not successful. Your basic decisions are to build a large manufacturing facility, a small manufacturing facility, or no facility at all. With a favorable market, you can expect to make $90,000 from large facility or $60,000 from the smaller facility. If the market is unfavorable, you would lose $30,000 with a large facility, and lose $20,000 with a small facility. You estimate that the probability of a favorable market, given a successful market study result, is estimated to be 0.8. The probability of an unfavorable market, given an unsuccessful market study result, is estimated to be 0.9. You feel that there is a 50-50 chance that the market study will be successful. You may bypass the market study and simply make the decision whether to build a large plant, a small plant, or no facility at all. Without doing any market study, you estimate the probability of a successful market is 0.6. Build a decision tree and make your decision.

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M91903114

Have any Question?


Related Questions in Operation Management

Michigan state figurine inc msf sells crystal figurines to

Michigan State Figurine Inc. (MSF) sells crystal figurines to Spartan fans. MSF buys the figurines from a manufacturer for $35 per unit. They send orders electronically to the manufacturer, costing $65 per order and they ...

Assignment - analysis of real mergeracquisition

Assignment - Analysis of Real Merger/Acquisition Cases Complete the following assignment and submit it to the Submissions Area. Using the Argosy library, Internet and other sources, locate two examples of mergers or acqu ...

1 identify why managers should be delegating discuss the

1. Identify why managers should be delegating. Discuss the skills, abilities and behaviors that make a good delegator. 2. Briefly specify the three reasons why ignorance about political matters is important. 3. How do sp ...

What analysis should be done to determine the training

What analysis should be done to determine the training needs of an organization? After the needs are determined, what is the next step? Suppose that you are the manager of an accounts receivable unit in a large company. ...

Improvement in standard of living education gives a person

Improvement in Standard of Living: Education gives a person all necessary knowledge and tools about how he can earn his daily bread and butter. He also gets knowledge about how he can raise standard of living with fulfil ...

Case study monicarsquos handbagsmonica after completing an

Case Study: Monica’s Handbags Monica, after completing an internship with a national apparel company, decided that she wanted to exercise her creative design talents and her strong entrepreneurial spirit by starting her ...

A large global automobile manufacturer is considering

A large global automobile manufacturer is considering outsourcing the manufacturing of a solenoid used in the transmission of its SUVs. The company estimates that annual fixed costs of manufacturing the part? in-house, w ...

The text discussed a not-so-effective method of dealing

The text discussed a not-so-effective method of dealing with conflict called avoidance. Managers, especially new managers, can sometimes be tempted to use this technique to resolve (avoid) conflict. Sometimes – at least ...

Answer the following questions based on the company amazon1

Answer the following questions based on the company Amazon 1. By which of the following this company pull off mass customization? And why? Justify your answer a) Trend of technology (Technology evolution) b) Their produc ...

You work for a highly successful international manufacturer

You work for a highly successful international manufacturer. Your boss is working with a group of clients who are located overseas and are not familiar with U.S. Tort Law. Your boss requests that you conduct some researc ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As