JDI,Incis Trying to Decide Whether to Make or Buy a Part

question 120

Essay

JDI,Inc.is trying to decide whether to make or buy a part (#J-45FPT).Purchasing the part would cost $1.50 each.If they design and produce it themselves,it will result in a per unit cost of $0.75.However,the design investment would be $50,000.Further,they realize that for this type of part,there is a 30% chance that the part will need to be redesigned at an additional cost of $50,000.Regardless of whether they make or buy the part,JDI will need 100,000 of these parts.Using decision trees analysis and EMV,what should JDI do? Show the decision tree.

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Definitions:

Productive

The efficiency and effectiveness in generating or producing goods, outcomes, or results from a given set of resources or efforts.

Benzodiazepine Sedative

A class of psychoactive drugs known to have calming effects, which are used to treat conditions like anxiety, insomnia, and seizures.

Psychoactive Drug

A substance that chemically alters brain activity, leading to changes in how we perceive things, feel, remain conscious, think, or act.

Sleeping Aid

A substance or method used to help an individual fall asleep or improve the quality of sleep.