A business plans to introduce a new product to the market. An investment of 1000 TL is required for this product to be put on the market. The unit gain of the new product has been determined as 113 TL. When similar products in the market are examined, it is predicted that the demand for this product will be high with 60% probability and low with 40% probability. It is expected that 743 products will be sold when demand is high, and 423 products when it is low. Instead of introducing this new product to the market, the company also plans to increase the sales of this product by making revisions to the existing product with an investment of 2000 TL. As a result of these increases, the current product is expected to be sold in 739 units, while the selling price of the product is 97 TL. Before making this decision, the business will be able to receive information about the market potential of the new product from a consultant by giving 1000 TL. It is anticipated that the consultant will give a positive or negative report on the sales potential of the new product. In the light of historical data, 70% of similar products with high demand gave a positive report; It was determined that similar products with low demand gave positive reports in 20%. Solve the business decision problem by drawing a decision tree. Find the expected value of your decision at the end of the solution.
decision tree
A business plans to introduce a new product to the market. An investment of 1000 TL is required for this product to be put on the market. The unit gain of the new product has been determined as 113 TL. When similar products in the market are examined, it is predicted that the demand for this product will be high with 60% probability and low with 40% probability. It is expected that 743 products will be sold when demand is high, and 423 products when it is low. Instead of introducing this new product to the market, the company also plans to increase the sales of this product by making revisions to the existing product with an investment of 2000 TL. As a result of these increases, the current product is expected to be sold in 739 units, while the selling price of the product is 97 TL. Before making this decision, the business will be able to receive information about the market potential of the new product from a consultant by giving 1000 TL. It is anticipated that the consultant will give a positive or negative report on the sales potential of the new product. In the light of historical data, 70% of similar products with high demand gave a positive report; It was determined that similar products with low demand gave positive reports in 20%. Solve the business decision problem by drawing a decision tree. Find the expected value of your decision at the end of the solution.
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