Question: please can you solve 4 and 5 and 6 ABC Electric is considering the introduction of a new product. This product can be produced in

please can you solve 4 and 5 and 6 ABC Electric

please can you solve 4 and 5 and 6

ABC Electric is considering the introduction of a new product. This product can be produced in one of several ways: (a) using the present assembly line at a cost of $25 per unit, (b) using the current assembly line after it has been overhauled (at a cost of $10.000) with a cost of $22 per unit; and (c) on an entirely new assembly line (costing $30,000) designed especially for the new product with a per unit cost of $20. Also the company has the option to do nothing. ABC is worried, however, about the impact of competition. If no competition occurs, they expect to sell 15,000 units the first year. With competition, the number of units sold is expected to drop to 9,000. At the moment, their best estimate is that there is a 40% chance of competition. They have decided to make their decision based on the first year sales. 1. Develop the decision table. 2- Develop the opportunity loss table. 3. What should they do? If the ABC Electrie have the option to conduct a market research to determine the probability of developing a competitive product more precisely, and the result of this research could be either positive or negative. The probability of positive research results is 35 percent. Positive research result will reduce the chance of developing a competitive product to 25 percent while negative results will increase this chance to 65 percent. However the research will cost $ 5000. 4- Develop a decision tree for this situation. 5. Do you advise ABC Electric to conduct the research? 6- If ABC Electric conducts the research, what is the best alternative under positive and negative research results? 7. For what value of probability for positive research results will ABC Electric be indifferent between conducting the research or not

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