Operations Management
11th Edition
ISBN: 9780132921145
Author: Jay Heizer
Publisher: PEARSON
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Chapter A, Problem 13P
Summary Introduction
To determine: The decision tree for the given situation.
Introduction: Decision-making is a process that helps to make decision. It is the process of choosing a best alternative by evaluating many alternatives.
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Emerson Electric is considering the purchase of equipment that will allow the company to manufacture a new line of wireless devices for home appliance control. The first cost will be $80,000 and the life estimated is 6 years with a salvage value of $10,000. Three different salespeople have provided estimates regarding the added revenue the equipment will generate. Salespersons 1,2, and 3 have made estimates of $10,000 , $16,000 , and $18,000 per year respectively if the Companys MARR is 8% per year find the PW of each salespersons estimates.
The Energy Tech Company is considering making a bid for a fuel processing contract from the Uganda government. Energy Tech's CEO decided to bid $112 million. The management team estimates that it has a 60% chance of winning the contract with this bid amount.
If the company wins the contract, it can choose one of three methods for processing the fuel. The company can develop a new method to process the fuel, use the existing process, though inefficient, or to subcontract the processing to a number of smaller companies once they get the fuel.
The following tables present the results of these alternatives:
DEVELOP NEW PROCESS
Outcomes
Probability
Profit in ($1,000,000s)
High success
0.30
$600
Moderate success
0.60
$300
Failure
0.10
($100)
USE CURRENT, BUT INEFFICIENT PROCESS:
Outcomes
Probability
Profit ($1,000,000s)
High success
0.50
$300
Moderate success
0.30
$200
Failure
0.20
($40)
SUBCONTRACT:
Outcome…
Chapter A Solutions
Operations Management
Ch. A - Prob. 1DQCh. A - Prob. 2DQCh. A - Prob. 3DQCh. A - Prob. 4DQCh. A - Prob. 5DQCh. A - Question: 6. Explain how decision trees might be...Ch. A - Prob. 7DQCh. A - Prob. 8DQCh. A - Question 9. Identify the five steps in analyzing a...Ch. A - Prob. 10DQ
Ch. A - Question 11. The expected value criterion is...Ch. A - Question 12. When are decision trees most useful?Ch. A - Given the following conditional value table,...Ch. A - Prob. 2PCh. A - Prob. 3PCh. A - Jeffrey Helm owns a health and fitness center...Ch. A - Prob. 5PCh. A - Prob. 6PCh. A - Prob. 7PCh. A - Prob. 8PCh. A - Prob. 9PCh. A - Prob. 10PCh. A - The University of Miami bookstore stocks textbooks...Ch. A - Palmer Jam Company is a small manufacturer of...Ch. A - Prob. 13PCh. A - Prob. 14PCh. A - Prob. 15PCh. A - Prob. 16PCh. A - Prob. 17PCh. A - Prob. 18PCh. A - Prob. 19PCh. A - Philip Musa can build either a large video rental...Ch. A - Prob. 21PCh. A - Prob. 22PCh. A - Prob. 23PCh. A - Question A.24 On the opening page of Module A and...Ch. A - Question Warehouse Tenting at the Port of Miami...Ch. A - Question Warehouse Tenting at the Port of Miami...Ch. A - Question Warehouse Tenting at the Port of Miami...
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