Question: A company needs to determine whether to build a small or large new store. Based on the management team's estimate, the chance of the future

A company needs to determine whether to build a

A company needs to determine whether to build a small or large new store. Based on the management team's estimate, the chance of the future market being poor, average, or excellent, as well as the return from each decision (small or large) under each market scenario is given in the table below. The managers want to make the decision of wheter to build a small or a large new store using the decision tree model. The decision tree corrresponding to the described scenario is given below. Apply the numbers in the table to run the decision tree model assessment by answering the folloiwng questions. (1) The expected return of building the small new store = (one decimal point) (2) The expected return of building the large new store = (one decimal point) (3) The choice based on the above analysis is to build the (Click to select) store. (4) The EVPI (Expected Value of Perfect Information) = | (one decimal point) Poor Average Excellent Probability 0.5 0.3 0.2 small store 20 40 50 large store -50 20 80 Poor market condition Average market condition Small store excellent market condition Large store Poor market condition Average market condition excellent market condition

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