Question: Help me with this 2 question. Thank you so much for your help. (Management Science) Question 3 Group LaBlaKa is wondering what activity to pursuit


Help me with this 2 question. Thank you so much for your help. (Management Science)


Question 3 Group LaBlaKa is wondering what activity to pursuit for the NKF Kidney Day. If "Kidney Chain" is chosen, the group will purchase and sell key chains for profit during the event. The unit cost for each key chain is $2 and the group plans to stock up 500 key chains from the supplier. Although key chain sales is uncertain, at selling price of S6 per key chain, the group expects to sell either 40%, 70% or 100% of the total stock, with probability of 25%, 70% and 5% respectively. In the event that there are left over stock, Group LaBlaKa has two disposal options. First option, all left over stock can be disposed back to the key chain supplier. However, the disposal price depends on Group LaBlaKa negotiating skill where the estimated probability for each possible disposal price are listed below. Disposal price Probability of Supplier m to ce 00/0 30% 70% Second option, Group LaBlaKa can make a rule where all group member must buy all left over stock at the fixed price of Sl per unit. (a) (b) (c) (d) Draw a decision tree to represent Group LaBlaKa's decision. Your tree has to fulfill the format as discussed in Chapter 3. (8 marks) Determine the best decision with the EMV approach. Show your calculation in format as discussed in Chapter 3 for partial credit. (5 marks) Draw a decision tree with Perfect Information on the probability of the key chain supplier agreeing to disposal price set by Group LaBlaKa (5 marks) Should Group LaBlaKa spend money to obtain Perfect Information stated in part (c)? Justify your conclusion (7 marks)
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