1) Tesla's decision to produce a new line of compact and full-sized cars in China resulted in the need to construct either a small plant or a large plant. The best selection of plant size depends on how the marketplace reacts to the new product line. To conduct an analysis, marketing management has decided to view the possible long-run demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollars: Long Run Demand Plant size Low Medium High Small 20 60 90 Large -50 100 120 a. Construct an influence diagram. (pay attention to the standard shapes used in influence diagrams)| b. Construct a decision tree. c. Recommend a decision based on the use of the i) optimistic ii) conservative

1) Tesla's decision to produce a new line of compact and full-sized cars in China resulted in the need to construct either a small plant or a large plant. The best selection of plant size depends on how the marketplace reacts to the new product line. To conduct an analysis, marketing management has decided to view the possible long-run demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollars: Long Run Demand Plant size Low Medium High Small 20 60 90 Large -50 100 120 a. Construct an influence diagram. (pay attention to the standard shapes used in influence diagrams)| b. Construct a decision tree. c. Recommend a decision based on the use of the i) optimistic ii) conservative

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 2P: Southland Corporation’s decision to produce a new line of recreational products resulted in the need...

See similar textbooks

Related questions

Q: Required: a. Prepare a statement of LLC liquidation. b. Provide the journal entry for the final cash…

A: Given Information: Lester Capital = $48,630 Torres Capital = $65,630 Hearst Capital = $26,190…

Q: What are the steps to figure this out?

A: Journal: Recording of a business transactions in a chronological order.

Q: How do I solve these?

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: can you be more clear of what the answer is? thanks

A: Given: Beginning of the Year Common Stock = $8 Additional Paid in Surplus = $138 End of the Year…

Q: What would be the equasion for solving this

A: Formula for calculating yearly payment: Yearly payment=(Loan amount * Rate%)1-1(1+Rate%)n

Q: Several items are omitted from the income statement and cost of goods manufactured statement data…

A: Cost of direct materials used in production = Materials inventory , December 1 + Materials purchased…

Q: i need details explanatio

A: Under FIFO method, unit purchase first, sold first. Cost of goods sold means we need calculate cost…

Q: Mel Snow is the manager of a firm, Taxation Matters, which specialises in the preparation of income…

A: ABC (Activity based costing) framework was created to manage the drawbacks of customary costing…

Q: Can you make QBI more understandable? Are you able to describe the steps?

A: Qualified Business Income Deduction (QBID) It is the final deduction to be made before…

Q: can i please get a correct answer for that question

A: The statement of comprehensive income is computed by adding the net income – which is found by…

Q: How can knowledge open doors ?

A: Solution- Knowledge something that can open many doors, knowledge gives you more opportunities in…

Q: 1. Complete the Adjustments columns using the following year-end adjustments information. a./b.…

A: Solution: Adjusting Entries are the journal entries that are made at the end of a given accounting…

Q: Revenues generated by a new fad product are forecast as follows: Revenues $5e, eee 35,eee 30, eee…

A: The calculation is:

Q: Can you please do this problem using an equation.

A: Compound interest is nothing but interest on interest. That means interest is calculated on the…

Q: Can you please explain more about the alternatives?

A: The limiting factor is due to resource scarcity. It would limit the production in terms of quantity.…

Q: I need to know how to find FIFO

A: The inventory method of costing is based on the quantity of purchases or inventory items and the…

Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

can you please solve this

1) Tesla's decision to produce a new line of compact and full-sized cars in China resulted in the need to construct
either a small plant or a large plant. The best selection of plant size depends on how the marketplace reacts to the
new product line. To conduct an analysis, marketing management has decided to view the possible long-run
demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollars:
Long Run Demand
Plant size
Low
Medium
High
Small
20
60
90
Large
-50
100
120
a. Construct an influence diagram. (pay attention to the standard shapes used in influence diagrams)||
b. Construct a decision tree.
c. Recommend a decision based on the use of the
ј) optimistic
ii) conservative
iii) minimax regret approaches.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Sampson Corporation is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are shown next: Possible Market Reaction Low response Moderate response High response Very high response Sales in Units 40 Probabilities 0.30 70 0.20 90 120 0.20 0.30 a. What is the expected value of unit sales for the new product? Note: Do not round Intermediate calculations and round your answer to the nearest whole unit.) Answer is complete but not entirely correct. Expected value 70 units b. What is the standard deviation of unit sales? Note: Do not round Intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. Standard deviation 19.24 units
Groove auto is considering the introduction of a new model of wireless speakers with the following price and cost characteristics.sales price 443.00 per unit.variable cost 203.00 per unit.fixed costs 715,000assume that the projected number of units sold for the year is 4 400.consider requirement b,c,d independent from each other. [a] What will the operating profit be? [b] What is the impact of operating profit if the sales price decreases by twenty percent increases by ten percent? [c] What is the impact on operating profit A veritable cost per unit decrease by ten percent increase by twenty? [d] Suppose that fixed costs for the year are 20% lower. Than projected and bearable costs per unit are 10% higher than projected. What impact will these costs changes have on operating profit for the year Kindly solve b c and d
The Gizmo Manufacturing Company is considering making and selling a new product. The following data have been provided to management: Some managers are reluctant to launch a new product because of the uncertainty of future sales. To provide management with information that might make it easier to draw the correct conclusion, a break-even analysis will be performed for annual sales required to economically justify introducing the new product.What is the break-even value of units sold annually?
The J.R. Ryland Computer Company is considering a plant expansion to enable the company to begin production of a new computer product. The companys president must determine whether to make the expansion a medium- or large-scale project. Demand for the new product is uncertain, which for planning purposes may be low demand, medium demand, or high demand. The probability estimates for demand are 0.20, 0.50, and 0.30, respectively. Letting x and y indicate the annual profit in thousands of dollars, the firms planners developed the following profit forecasts for the medium-and large-scale expansion projects. a. Compute the expected value for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of maximizing the expected profit? b. Compute the variance for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk or uncertainty?
Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?
Suppose you are analyzing a firm that is successfully executing a strategy that differentiates its products from those of its competitors. Because of this strategy, you project that next year the firm will generate 6.0% revenue growth from price increases and 3.0% revenue growth from sales volume increases. Assume that the firms production cost structure involves strictly variable costs. (That is, the cost to produce each unit of product remains the same.) Should you project that the firms gross profit will increase next year? If you project that the gross profit will increase, is the increase a result of volume growth, price growth, or both? Should you project that the firms gross profit margin (gross profit divided by sales) will increase next year? If you project that the gross profit margin will increase, is the increase a result of volume growth, price growth, or both?
Baghdad Company produces a single product. They have recently received the result of a market survey that indicates that they can increase the retail price of their product by 10% without losing customers or market share. All other costs will remain unchanged. If they enact the 10% price increase, what will be their new break-even point in units and dollars? Their most recent CVP analysis is:
Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next: Possible Market Reaction Sales in Units Probabilities Low response 25 0.20 Moderate response 30 0.10 High response 50 Very high response 70 0.10 0.60 a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.) Expected value units b. What is the standard deviation of unit sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Standard deviation units
Sampson Corp. is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are shown next: Possible Market Reaction Sales in Units Probabilities Low response 80 0.20 Moderate response 90 0.30 High response 110 0.10 Very high response 140 0.40 a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.) b. What is the standard deviation of unit sales?
Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next: Possible Market Reaction Sales in Units Probabilities Low response 10 0.30 Moderate response 25 0.20 High response 40 0.30 Very high response 65 0.20 a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.) b. What is the standard deviation of unit sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Sampson Corp. is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are shown next: Possible Sales Market Reaction in Units Probabilities Low response Moderate response High response Very high response 60 0.10 70 0.30 100 0.50 130 0.10 a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.) Expected value units b. What is the standard deviation of unit sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Standard deviation units
Grove Audio is considering the introduction of a new model of wireless speakers with the following price and cost characteristics. Sales price $ 450.00 per unit Variable costs 210.00 per unit Fixed costs 764,000 per year Assume that the projected number of units sold for the year is 4,750. Consider requirements (b), (c), and (d) independently of each other. What will the operating profit be? What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? Suppose that fixed costs for the year are 20 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?