Question

a) Find the expected monetary value for each of the alternatives (subcontract, expand, and build)

b) Determine the alternative that should be selected in order to maximize the expected monetary value

rur uount Kubota US $1.0% Do nothing 1.3 $1.3 $1.5 $16k $1.8 Do nothing Do nothing $0.7 Other use #1 $1.5 Expand Medium demand (5) $1.6 Do nothing $1.6 Subcontract $1.5 $1.7 Do nothing $0.9 $1.4 $1.0 $1.0 $1.1 Other use #1 Small demand (.4) Do nothing nd (5) 00, Other use # 1 $0.9 Dec seon uee 'rorn wょStevenso, Produtonoerfalleria Maaagement, 6/" D, 228, and problem hon, p. 73。1999 value: 772 points Eigure 18.3 gives a decision tree presented in the book Production/Operations Management by William J. Stevenson. Use this tree diagram to do the following: (a) Find the expected monetary value for each of the alternatives (subcontract, expand, and build). (Round your answers to 2 decimal places. Enter your answe the "$" sign in your response.) EMV (Subcontract) EMV(Expand) EMV(Build) (b) Determine the alternative that should be selected in order to maximize the expected monetary value. (Click to select)

Answer 1

ouild 0.9 1.0 35 epond 1-35 manimus CS Scanned with CamScanner

1.3 23 0-6108+0. s Scanned with CamScanner