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Bushcraft Aerodynamics wishes to refresh their most popular airplane model for the coming 2025 model year. Bushcraft's marketing department provided the following three model refresh plan: Plan A Plan B Plan C Update the avionics. This would enable the plane to be flown under the Instrument Flying Rule (IFR), meaning the plane can operate when the Visual Flying Rule (VFR) is not viable. The updated avionics would also enable the much-asked autopilot capabilities. The update would cost Bushcraft $300,000 in RND, and an additional $500,000 in avionics procurement, should the RND to be successful. The analysts predict this would generate an additional $3,000,000 in profit. Improve the airframe rigidity by replacing key components with titanium and carbon fiber. The improved airframe rigidity would drastically improve the maneuverability of the airplane, and the new components would further decrease the airplane's stall velocity, greatly improve the aerobatics capability of the airplane. The engineering department predicts this improvement would cost the company $1,000,000, but the aerobatic capability of the plane would likely to generate $5,000,000 in profit Floatplane conversion. Engineers at Bushcraft suggested that by installing floatation equipment, Bushcraft can easily convert their best-selling aircraft into an amphibious beast. This would not cost Bushcraft any capital in RND since Bushcraft was well-known for its combat airship from the 1960s. However, this would still make the current model the first-ever general-purpose amphibious aircraft Bushcraft ever made, so an additional marketing cost of $800,000 is expected. The amphibious model of the plane would attract tourist chartered flights to purchase more Bushcraft planes and the profit is estimated to be $2,500,000. Based on those information, the business analysts at Bushcraft Aerodynamics made the following decision tree, along with their probability estimation:

Bushcraft Aerodynamics wishes to refresh their most popular airplane model for the coming 2025 model year. Bushcraft's marketing department provided the following three model refresh plan: Plan A Plan B Plan C Update the avionics. This would enable the plane to be flown under the Instrument Flying Rule (IFR), meaning the plane can operate when the Visual Flying Rule (VFR) is not viable. The updated avionics would also enable the much-asked autopilot capabilities. The update would cost Bushcraft $300,000 in RND, and an additional $500,000 in avionics procurement, should the RND to be successful. The analysts predict this would generate an additional $3,000,000 in profit. Improve the airframe rigidity by replacing key components with titanium and carbon fiber. The improved airframe rigidity would drastically improve the maneuverability of the airplane, and the new components would further decrease the airplane's stall velocity, greatly improve the aerobatics capability of the airplane. The engineering department predicts this improvement would cost the company $1,000,000, but the aerobatic capability of the plane would likely to generate $5,000,000 in profit Floatplane conversion. Engineers at Bushcraft suggested that by installing floatation equipment, Bushcraft can easily convert their best-selling aircraft into an amphibious beast. This would not cost Bushcraft any capital in RND since Bushcraft was well-known for its combat airship from the 1960s. However, this would still make the current model the first-ever general-purpose amphibious aircraft Bushcraft ever made, so an additional marketing cost of $800,000 is expected. The amphibious model of the plane would attract tourist chartered flights to purchase more Bushcraft planes and the profit is estimated to be $2,500,000. Based on those information, the business analysts at Bushcraft Aerodynamics made the following decision tree, along with their probability estimation:

Elements Of Electromagnetics
Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
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Bushcraft Aerodynamics wishes to refresh their most popular airplane model for the coming 2025 model year. Bushcraft's marketing department provided the following three model refresh plan: Plan A Plan B Plan C Update the avionics. This would enable the plane to be flown under the Instrument Flying Rule (IFR), meaning the plane can operate when the Visual Flying Rule (VFR) is not viable. The updated avionics would also enable the much-asked autopilot capabilities. The update would cost Bushcraft $300,000 in RND, and an additional $500,000 in avionics procurement, should the RND to be successful. The analysts predict this would generate an additional $3,000,000 in profit. Improve the airframe rigidity by replacing key components with titanium and carbon fiber. The improved airframe rigidity would drastically improve the maneuverability of the airplane, and the new components would further decrease the airplane's stall velocity, greatly improve the aerobatics capability of the airplane. The engineering department predicts this improvement would cost the company $1,000,000, but the aerobatic capability of the plane would likely to generate $5,000,000 in profit Floatplane conversion. Engineers at Bushcraft suggested that by installing floatation equipment, Bushcraft can easily convert their best-selling aircraft into an amphibious beast. This would not cost Bushcraft any capital in RND since Bushcraft was well-known for its combat airship from the 1960s. However, this would still make the current model the first-ever general-purpose amphibious aircraft Bushcraft ever made, so an additional marketing cost of $800,000 is expected. The amphibious model of the plane would attract tourist chartered flights to purchase more Bushcraft planes and the profit is estimated to be $2,500,000. Based on those information, the business analysts at Bushcraft Aerodynamics made the following decision tree, along with their probability estimation: -Refresh Plan Avionic Update Airframe Improvement Floatplane Conversion -300000 -1000000 -800000 RND Success RND Failure RND Success RND Failure Marketing Success Marketing Failure 70.0% -500000 30.0% 0 70.0% 5000000 30.0% 0 85.0% 2500000 15.0% 0 Procurement Success Procurement Failure 80.0% 3000000 20.0% 0
Transcribed Image Text:Bushcraft Aerodynamics wishes to refresh their most popular airplane model for the coming 2025 model year. Bushcraft's marketing department provided the following three model refresh plan: Plan A Plan B Plan C Update the avionics. This would enable the plane to be flown under the Instrument Flying Rule (IFR), meaning the plane can operate when the Visual Flying Rule (VFR) is not viable. The updated avionics would also enable the much-asked autopilot capabilities. The update would cost Bushcraft $300,000 in RND, and an additional $500,000 in avionics procurement, should the RND to be successful. The analysts predict this would generate an additional $3,000,000 in profit. Improve the airframe rigidity by replacing key components with titanium and carbon fiber. The improved airframe rigidity would drastically improve the maneuverability of the airplane, and the new components would further decrease the airplane's stall velocity, greatly improve the aerobatics capability of the airplane. The engineering department predicts this improvement would cost the company $1,000,000, but the aerobatic capability of the plane would likely to generate $5,000,000 in profit Floatplane conversion. Engineers at Bushcraft suggested that by installing floatation equipment, Bushcraft can easily convert their best-selling aircraft into an amphibious beast. This would not cost Bushcraft any capital in RND since Bushcraft was well-known for its combat airship from the 1960s. However, this would still make the current model the first-ever general-purpose amphibious aircraft Bushcraft ever made, so an additional marketing cost of $800,000 is expected. The amphibious model of the plane would attract tourist chartered flights to purchase more Bushcraft planes and the profit is estimated to be $2,500,000. Based on those information, the business analysts at Bushcraft Aerodynamics made the following decision tree, along with their probability estimation: -Refresh Plan Avionic Update Airframe Improvement Floatplane Conversion -300000 -1000000 -800000 RND Success RND Failure RND Success RND Failure Marketing Success Marketing Failure 70.0% -500000 30.0% 0 70.0% 5000000 30.0% 0 85.0% 2500000 15.0% 0 Procurement Success Procurement Failure 80.0% 3000000 20.0% 0
Based on this tree, find the optimal course of action for Bushcraft Avionics, and calculate the EVPI.
Transcribed Image Text:Based on this tree, find the optimal course of action for Bushcraft Avionics, and calculate the EVPI.
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