- You are a consultant for Moon Micro, a manufacturer of computer systems, that currently has a capacity of 12,000 computers and its demand has reached 12,000, but expects the demand for its computers would increase in the next two years. You have two options. One is to increase Moon Micro's existing capacity by 10,000 units at an annualized fixed cost of $5 million plus $200 labor cost per computer. The second option is to buy computers from a supplier, Goodcomp at a cost of $1000 (excluding raw materials cost). Raw material cost $800 per computer. You must make a decision for a two-year time horizon. The demand for your computers has an 80 percent chance of increasing 60 percent from the year before and 20 percent chance of remaining the same as the year before. Use a decision tree to determine whether moon should add capacity or buy computers to meet demand more than its existing capacity from Goodcomp. Assume that costs are incurred at the beginning of each year. Use an annual discount factor of 15%.