Light demand moderate demand heavy demand Probability 0.25 0.45 0.3 Tire type A $325000 $190000 $170000 B $300000 $420000 $400000 C -$400000 $240000 $800000 A what decision should the firm make if the maximax criterion is used. B. what decision should the firm make if the maximin criterion is used. C. what decision should the firm make if LaPlace criterion is used. D. Construct a decision tree to help the management of big wheel distributor make the appropriate decisions. This tree must be constructed in logical order with labels and net payoffs E. Given the probabilities of the three types of tires and the expected monetary values, what decision should be made and what is that optimal expected value F. What is the most should the firm be willing to pay to obtain further (perfect) information (EVPI) concerning the demand for the tires
Breakeven Analysis
Break Even Analysis is a term used in business, cost accounting and economics. It refers to a point where the total cost incurred becomes equal to the total revenue earned. Break Even Analysis determines the number of units to be sold to earn the revenue required to cover the total costs. Total cost is a sum total of fixed and variable costs.
Process analysis
The term process analysis can be defined as breakdown of production process into different phases that converts inputs into output. A series of routine activities are incorporated using organizational resources with a view to achieve operational excellence.
|
|
Light demand | moderate demand | heavy demand |
| Probability | 0.25 | 0.45 | 0.3 |
| Tire type | |||
| A | $325000 | $190000 | $170000 |
| B | $300000 | $420000 | $400000 |
| C | -$400000 | $240000 |
$800000 |
A what decision should the firm make if the maximax criterion is used.
B. what decision should the firm make if the maximin criterion is used.
C. what decision should the firm make if LaPlace criterion is used.
D. Construct a decision tree to help the management of big wheel distributor make the appropriate decisions. This tree must be constructed in logical order with labels and net payoffs
E. Given the probabilities of the three types of tires and the expected monetary values, what decision should be made and what is that optimal expected value
F. What is the most should the firm be willing to pay to obtain further (perfect) information (EVPI) concerning the demand for the tires
Step by step
Solved in 2 steps with 2 images
