BUS 499 Module 4 Assignment 2 Probability Analyses | Documents and Forms | Research Papers

BUS 499 Module 4 Assignment 2 Probability Analyses

BUS 499 Module 4 Assignment 2 Probability Analyses PLDZ-868
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A General Manger of Harley-Davidson has to decide on the size of a new facility. The GM has narrowed the choices to two: large facility or small facility. The company has collected information on the payoffs. It now has to decide which option is the best using probability analysis, the decision tree model, and expected monetary value.

Options:

Facility

Demand Options

Probability

Actions

Expected Payoffs

 

 

 

 

 

Large

Low Demand

 

Do Nothing

($10)

 

Low Demand

 

Reduce Prices

$50

 

High Demand

 

 

$70

 

 

 

 

 

Small

Low Demand

 

 

$40

 

High Demand

 

Do Nothing

$40

 

High Demand

 

Overtime

$50

 

High Demand

 

Expand

$55

 

Determination of chance probability and respective payoffs:

Build Small:

 

Low Demand

 

High Demand

 

 

 

Build Large:

 

Low Demand

 

High Demand

 

Determination of Expected Value of each alternative Build Small: $16+$33=$49 Build Large: $20+$42=$62

 

A General Manger of Harley-Davidson has to decide on the size of a new facility. The GM has narrowed the choices to two: large facility or small facility. The company has collected information on the payoffs. It now has to decide which option is the
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