Is decision tree really necessary? (Drop down options) Yes/No

If so, what does it add to the analysis? If not, why not? Explain your reasoning.

This is an example of a one-stage OR multi-stage 4 decision problem, where EMVs are easy OR hard to calculate with Excel formulas, and sensitivity analysis can OR cannot Ibe performed with data tables.

Perform a sensitivity analysis on the optimal decision, letting the three monetary inputs vary one at a time over reasonable ranges, and summarize your findings. Which of the inputs appears to have the largest effect on the best solution?

Select ONE

Cost of each pair of new tennis shoes.

Selling price of each pair of shoes.

Closeout sale price of each leftover pair.

All three monetary inputs.

A buyer for a large department store chain must place orders with an athletic shoe manufacturer six months prior to the time the shoes will be sold in the department stores. The buyer must decide on November 1 how many pairs of the manufacturer's newest model of tennis shoes to order for sale during the coming summer season. Assume that each pair of this new brand of tennis shoes costs the department store chain $45 per pair. Furthermore, assume that each pair of these shoes can then be sold to the chain's customers for $70 per pair. Any pairs of these shoes remaining unsold at the end of the summer season will be sold in a closeout sale next fall for $25 each. The probability distribution of consumer demand for these tennis shoes during the coming summer season has been assesed by march provided in the file P06_35.xlsx. Finally, assume that the department store chain must purchase these tennis shoes from the manufacturer in lots of 100 pairs. a. Identify the strategy that maximizes the department store chain's expected profit earned by purchasing and subsequently selling pairs of the new tennis shoes. The optimal decision is to purchase pairs of shoes prior to the coming summer season. By doing so, the buyer achieves an EMV of Is a decision tree really necessary? If so, what does it add to the analysis? If not, why not? Explain your reasoning. This is an example of a decision problem, where EMVs are to calculate with Excel formulas, and sensitivity analysis be performed with data tables. b. Perform a sensitivity analysis on the optimal decision, letting the three monetary inputs vary one at a time over reasonable ranges, and summarize your finding. Which of the inputs appears to have the largest effect on the best solution? Shoe demand distribution Demand (100s of pairs) Probability \begin{tabular}{|c|c|} \hline 1 & 0.025 \\ \hline 2 & 0.050 \\ \hline 3 & 0.075 \\ \hline 4 & 0.100 \\ \hline 5 & 0.150 \\ \hline 6 & 0.200 \\ \hline 7 & 0.175 \\ \hline 8 & 0.100 \\ \hline 9 & 0.075 \\ \hline 10 & 0.050 \\ \hline \end{tabular}