OPTIONS FOR PULLDOWN ANSWERS

The best decision is to

1. Do Not Expand Facility

2. Expand Facility

and if

1. Strong

2. Weak

Product Demand" occurs, choose

1. Do Not Lease New Facility

2. Lease New Facility

Please Explain Your choices!

Thank You

The owner of Pearl Automotive Dealers is trying to decide whether to expand his current facility. If he expands and customer demand turns weak, there is a chance he could lease part of his newly constructed facility to another dealer. If he doesn't expand and strong demand occurs, he could attempt to lease another facility across town. What is the best set of decisions and the expected payoff? Click the icon to view the decision tree. The best decision is to and if" Product Demand" occurs, choose More Info -X Strong Demand 55% Aver. Demand 30% Expand Facilities Weak Demand 15% $2,600,000 Property is Leased $380,000 $1,700,000 (10%) Lease New Facility Property is not Leased (90%) $60,000 2 Do not Lease New Facility_$160.000 Property is Leased $2,200,000 3 Lease New Facility (1094 Do not Lease New Facility $1,800,000 $1.700,000 Property is not $1,300,000 Leased (90%) Strong Demand 55% Do not Expand Facilities Aver. Demand 30% Weak Demand 15% $800.000 Print Done