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27 An employee has been asked to decide which machine to choose from four possibilities. The purchase and installation cost for each machine is identical. The board of directors will support the employee's position s long as it is ensured that there is no likelihood of a reduction in productivity with the new machine. The decision tree below describes the conditions and expected values. Save Which machine to purchase? Which machine to purchase? Save Machine A O Machine D O Machine B O Machine A O Machine C Machine B Machine S Machine ( Increase productivity $100,000 Increase productivity $50,000 Increase productivity $100,000 No increase in productivity Increase productivity $80,000 fecrease productivity $25,000 Increase productivity $250,000 Decrease productivity son Machine C Machine D Probability 0.25 Probability 0.75 Probability 0.50 Probability 01.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 No increase in productivity Increase productivity $50,000 Increase productivity $25,000 Increase productivity $250,000 Decrease productivity $50,000 $62,500 $50,000 $35,000 $100,000 Probability 0.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 $35,000 $100,000 Which machine should this employee select to assure the board of directors that there is no likelihood of a reduction in productivity?

27 An employee has been asked to decide which machine to choose from four possibilities. The purchase and installation cost for each machine is identical. The board of directors will support the employee's position s long as it is ensured that there is no likelihood of a reduction in productivity with the new machine. The decision tree below describes the conditions and expected values. Save Which machine to purchase? Which machine to purchase? Save Machine A O Machine D O Machine B O Machine A O Machine C Machine B Machine S Machine ( Increase productivity $100,000 Increase productivity $50,000 Increase productivity $100,000 No increase in productivity Increase productivity $80,000 fecrease productivity $25,000 Increase productivity $250,000 Decrease productivity son Machine C Machine D Probability 0.25 Probability 0.75 Probability 0.50 Probability 01.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 No increase in productivity Increase productivity $50,000 Increase productivity $25,000 Increase productivity $250,000 Decrease productivity $50,000 $62,500 $50,000 $35,000 $100,000 Probability 0.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 $35,000 $100,000 Which machine should this employee select to assure the board of directors that there is no likelihood of a reduction in productivity?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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27 An employee has been asked to decide which machine to choose from four possibilities. The purchase and installation cost for each machine is identical. The board of directors will support the employee's position as long as it is ensured that there is no likelihood of a reduction in productivity with the new machine. The decision tree below describes the conditions and expected values. Save Which machine to purchase? Which machine to purchase? Save Machine A O Machine D Machine B O Machine A O Machine C Machine B Machine [ Machine D Increase productivity $100,000 Increase productivity $50,000 Increase productivity $100,000 No increase in productivity Increase productivity $50,000 fecrease productivity $25,000 Increase productivity $250,000 Decrease productivity 550.000 Machine C Machine D Probability 0.25 Probability 0.75 Probability 0.50 Probability 0.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 No increase in productivity Increase productivity $50,000 Increase productivity $25,000 Increase productivity $250,000 Decrease productivity $50,000 $62,500 $50,000 $35,000 $100,000 Probability 0.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 $35,000 $100,000 O Which machine should this employee select to assure the board of directors that there is no likelihood of a reduction in productivity?
Transcribed Image Text:27 An employee has been asked to decide which machine to choose from four possibilities. The purchase and installation cost for each machine is identical. The board of directors will support the employee's position as long as it is ensured that there is no likelihood of a reduction in productivity with the new machine. The decision tree below describes the conditions and expected values. Save Which machine to purchase? Which machine to purchase? Save Machine A O Machine D Machine B O Machine A O Machine C Machine B Machine [ Machine D Increase productivity $100,000 Increase productivity $50,000 Increase productivity $100,000 No increase in productivity Increase productivity $50,000 fecrease productivity $25,000 Increase productivity $250,000 Decrease productivity 550.000 Machine C Machine D Probability 0.25 Probability 0.75 Probability 0.50 Probability 0.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 No increase in productivity Increase productivity $50,000 Increase productivity $25,000 Increase productivity $250,000 Decrease productivity $50,000 $62,500 $50,000 $35,000 $100,000 Probability 0.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 $35,000 $100,000 O Which machine should this employee select to assure the board of directors that there is no likelihood of a reduction in productivity?
29 A custom surfboard and wave board manufacturer is working on a project to launch a new surfboard. The PERT chart for this project is provided below. Develop ad campaign Duration: 20 days Book ad space Duration: 2 days Build and test prototype Duration: 30 days Buy production equipment Duration: 50 days Revise design Duration: 10 days Build final product Duration: 25 days Implement barcoding Duration: 20 days Product launch Duration: 10 days Based on the PERT chart above, what is the critical path for this project? Buy production equipment - Build final product - Product launch O Book ad space-Develop ad campaign - Product launch O Build and test prototype - Revise design - Build final product - Product launch Buy production equipment - Implement barcoding - Product launch
Transcribed Image Text:29 A custom surfboard and wave board manufacturer is working on a project to launch a new surfboard. The PERT chart for this project is provided below. Develop ad campaign Duration: 20 days Book ad space Duration: 2 days Build and test prototype Duration: 30 days Buy production equipment Duration: 50 days Revise design Duration: 10 days Build final product Duration: 25 days Implement barcoding Duration: 20 days Product launch Duration: 10 days Based on the PERT chart above, what is the critical path for this project? Buy production equipment - Build final product - Product launch O Book ad space-Develop ad campaign - Product launch O Build and test prototype - Revise design - Build final product - Product launch Buy production equipment - Implement barcoding - Product launch
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