The Accompanying Figure Shows the Decision Tree of an Operations

question 11

Multiple Choice

The accompanying figure shows the decision tree of an operations manager who is considering a new production technique. ER represents his expected return (in thousand $) from the new technique. If he does not adopt the technique his expected return would be zero. The probabilities of the technique being a success or a failure are .7 and .3 respectively. Compute the expected return (in thousand $) from the adoption of the new production technique.

• A) $8,400
• B) $1,000
• C) -$2,000
• D) $7,200
• E) $8,000

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Definitions:

Avoids Conflict

Refers to actions or strategies designed to prevent disagreements or disputes from arising.

Common Goal

An objective or purpose shared by a group of individuals or entities, aiming towards a mutual benefit.

Original Schedule

The initial plan or timetable set for a series of tasks or events, which may be subject to change.

Project Regularly

The practice of consistently and systematically working on a project over time to ensure progress and eventual completion.