Construct a decision tree

Problem 2 (input data TC, LC, PC are given in appendix) A leading lubrication company operating in KSA is investigating improving their network design. The current design has an annual cost of SAR TC including production and logistics costs. They have identified a new network design with the following annual cost factors: production cost of SAR PC and logistics cost of SAR LC. As opposed to the current network design, the new network design is subject to uncertainty. Company X estimates that the annual change in production cost and its probability as follows: Tchlo 1. Anmual rhanoo in the now docion nraduction cost Company X estimates that the annual change in logistics cost and its probability as follows: Table 2: Annual chanoe in the new desion logistics cost The discount rate is k=0.08 and the time period considered is 2 years including the initial year. Round yours results to the closest integer and provide the detailed calculations. 1. The total cost of the current design cost for two years. 2. The expected production cost of the new design cost for two years. 3. The expected logistics cost of the new design cost for two years. 4. Based on the previous results do you recommend the adoption of the new design? Justify your answer. 1 Appendix: input values for problem 1 and 2 Problem 2 (input data TC, LC, PC are given in appendix) A leading lubrication company operating in KSA is investigating improving their network design. The current design has an annual cost of SAR TC including production and logistics costs. They have identified a new network design with the following annual cost factors: production cost of SAR PC and logistics cost of SAR LC. As opposed to the current network design, the new network design is subject to uncertainty. Company X estimates that the annual change in production cost and its probability as follows: Tchlo 1. Anmual rhanoo in the now docion nraduction cost Company X estimates that the annual change in logistics cost and its probability as follows: Table 2: Annual chanoe in the new desion logistics cost The discount rate is k=0.08 and the time period considered is 2 years including the initial year. Round yours results to the closest integer and provide the detailed calculations. 1. The total cost of the current design cost for two years. 2. The expected production cost of the new design cost for two years. 3. The expected logistics cost of the new design cost for two years. 4. Based on the previous results do you recommend the adoption of the new design? Justify your answer. 1 Appendix: input values for problem 1 and 2