question 3 and four

Question three (10 marks) e 0.06 Alexandria electric store intends to start a new store at Cairo, the following table Contains information about four potential locations A, B, C,D. Using the factor rating method to find which the best location is. Rat Locations Factors A B C D E Availability of raw materials 0.04 8 5 498 Nearness to the market 0.15 7 7 8 95 Availability of labor 0.2 9 5 9 4 8 Transport facilities 3 8 7 8 9 Availability of fuel and power 0.05 6 9 4 6 5 Availability of water 0.12 7 8 8 7 6 Suitability of climate 0.05 5 7 4 8 4 Government policies 0.18 6 9 7 6 8 Availability of finance 6 6 9 4 7 Availability of facilities 0.07 8 498 Question four (10 marks) El-Saraya Coffee Co. operates a chain of coffee shops and has decided to open a new store. The demand will be weak, fair, or strong; probabilities are 0.25, 0.30, and 0.45, respectively. If the company installs a small booth that sells only coffee, the associated payoffs Egyptian Pound are (25,000); 25,000; and $100,000 for weak, fair, and strong demand. If the company chooses an expanded facility that offers sandwiches and breakfast foods, it must build a kitchen and rent additional space. The payoffs for an expanded facility are (200,000), (25,000), and 500,000. Draw a decision tree for this problem. What should management do to achieve the highest expected payoff? 0.08 5