Question: Here the exercicse 2 attached. Ex 1 : A company decides to release a new product. There is 6 million euros cost for development. The
Here the exercicse attached.
Ex : A company decides to release a new product. There is million euros cost for development. The selling price will be The company contemplates three different scenarios: good, fair and bad; with probabilities and The associated sales to these three scenarios are and thousand units, respectively. Ex : Let us reconsider the previous example, but now allow for the chance that the product will be a fail for technical reasons. The probability of failure is The million of development is now split into million for development; and million for marketing only to be incurred if the product development is successfulAll other data are the same. Modify Example of the materials discussed in class. Assume no consulting services are available yet.Allow for two levels of technological failure: minor technical failure with probability ; and design failure with probability In the first level, the company can pay a further development costDto fix the product and make it a technological success. Then they decide whether to market the product or not. In the second level failurethe project must be abandoned.
Modify the decision tree accordingly. do it really graphically
Find the valuesofDthat will let the company invest in fixing the product and market itif the first level of technological failure occurs? for the teacher D is around find it please
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