A General Manger of Harley-Davidson has to decide on the size of a new facility. The GM has narrowed the choices to two: large facility or small facility. The company has collected information on the payoffs. It now has to decide which option is the best using probability analysis, the decision tree model, and expected monetary value.
Determination of chance probability and respective payoffs:
Determination of Expected Value of each alternative Build Small: $16+$33=$49 Build Large: $20+$42=$62
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Submit your conclusion in a Word document to the M4: Assignment 2 Dropbox by Wednesday, March 18, 2015.
Assignment 2 Grading Criteria
The diagram is accurate and labeled correctly. The diagram clearly illustrates the sequence of events and their probability of occurrences.
A step-by-step breakdown of the calculations for the chance of probability and respective payoff is clearly communicated. The results of the calculations are accurate.
A step-by-step breakdown of the calculations for expected value is clearly communicated. The results of the calculations are accurate.
Clear and concise statement explaining the decision and a description of elements that lead to the decision.