please show calculations in steps

56) Use the information from Scenario 6.1 to determine the total (operating and building) cost of the best alternative for a two year period. A) $2,000,000 B) $1.200,000 C) $2,205,000 D) $2,810,000 Answer: C Diff: 2 Topic: 6.4: Evaluating Network Design Decisions Using Decision Trees AACSB: Analytical thinking Objective: LO 6.2: Define relevant risks and explain different strategies that may be used to mitigate risk in global supply chains. 57) Use the information from Scenario 6.1 to determine the likelihood of high demand that would make the decision maker indifferent between the two alternatives for a two-year operating time. A) 0.86 B) 0.72 C) 0.28 D) 0.14 Answer: D Diff: 2 Topic: 6.4: Evaluating Network Design Decisions Using Decision Trees AACSB: Analytical thinking Objective: LO 6.2: Define relevant risks and explain different strategies that may be used to. mitigate risk in global supply chains. 581) Suppose the contractor has found some materials on Craigslist that can drop the construction cost of a large facility to $1,500,000. These materials cannot be used in the construction of the small facility, so its price remains as indicated in Scenario 6.1. Determine the likelihood of high demand that would make the decision maker indifferent between the two alternatives for a twoyear time period. A) 1.0 B) 0.72 C) 0.92 D) 0.86 Answer: A Diff: 2 Topic: 6.4: Evaluating Network Design Decisions Using Decision Trees AACSB: Analytical thinking Objective: LO 6.2: Define relevant risks and explain different strategies that may be used to mitigate risk in global supply chains. Bahouth Ltd, is planning for the next two years of production and debating whether to construct a large cross-dock facility with 40 truck bays or a smaller one with 20 truck bays. The cost to build the large facility is $2 million and the cost to build the small one is $1.2 million. If they construct a large facility and demand is as high as they hope, then operating costs are $450,000 annually. If they constrict a large facility and demand is low, then operating costs are $300,000. If they construct a small facility and demand is low, the operating costs are $275,000 but if they experience high demand, the operating cost of a small facility increases to $600,000. After having conducted some market research, they feel that the likelihood of high demand is 0.7 and the likelihood of small demand is 0.3. 54) Use the information from Scenario 6.1 to determine the expected cost of operating a large facility for two years. A. $810,000 B) 5450,000 C) $405,000 D) $2,810,000 Answer: A Diff: 2 Topic: 6.4: Evaluating Network Design Decisions Using Decision Trees AACSB: Analytical thinking Objective: LO 6.2: Define relevant risks and explain different strategies that may be used to mitigate risk in global supply chains. 55) Use the information from Scenario 6.1 to determine the expected cost of operating a small facility for a period of two years. A) $1,102,500 B) $1,005,500 C) 5502,500 D) $2,205,000 Answer: B Diff: 2 Topic: 6.4: Evaluating Network Design Decisions Using Decision Trees AACSB: Analytical thinking Objective: LO 6.2: Define relevant risks and explain different strategies that may be used to mitigate risk in global supply chains