A Manager Is Quite Concerned About the Recent Deterioration of a Section

question 26

Essay

A manager is quite concerned about the recent deterioration of a section of the roof on a building that houses her firm's computer operations.According to her assistant there are three options which merit consideration: A, B, and C.Moreover, there are three possible future conditions that must be included in the analysis: I, which has a probability of occurrence of .5; II, which has a probability of .3; and III, which has a probability of .2.
If condition I materializes, A will cost $12,000, B will cost $20,000, and C will cost $16,000.If condition II materializes, the costs will be $15,000 for A, $18,000 for B, and $14,000 for C.If condition III materializes, the costs will be $10,000 for A, $15,000 for B, and $19,000 for C.
(A) Draw a decision tree for this problem.
(B) Using expected monetary value, which alternative should be chosen?

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Definitions:

Cultural Diversity

Cultural diversity refers to the presence of varied cultural backgrounds, traditions, and perspectives within a community or organization.

Diverse Customer Base

A clientele composed of individuals from various demographic, geographic, and cultural backgrounds, reflecting a broad spectrum of preferences and needs.

Greater Competition

An increase in the number of competitors in a market, which can lead to improvements in quality, innovation, and pricing for consumers.

Outside Distractions

External factors or stimuli that divert attention away from a focal task or goal.