Decission
3
NAMA: YUNIA ISTIFANI NRP:F34120062 Latihan “Case in Decision Tree : The Southern Textile Company” Market will grow (p = 0.60) $ 2,000,000 Expand the land EV 2 = $ 1,290,000 $ 490,000 - $ 800,000 Market will not grow (p = 0.40) $ 225,000 Market will grow (p = 0.70) $ 3,000,000 EV 1 = $ 1,022,000 Expand EV 6 = $ 2,310,000 $ 1,510,000 - $ 800,000 Market will not grow (p = 0.30) Market will grow (p = 0.60) EV 4 = $ 1,510,000 $ 700,000 Land will be sold $ 450,000
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Transcript of Decission
NAMA: YUNIA ISTIFANI NRP:F34120062
Latihan “Case in Decision Tree : The Southern Textile Company”
Market will grow (p = 0.60)$ 2,000,000
Expand the land EV2 = $ 1,290,000$ 490,000 - $ 800,000
Market will not grow (p = 0.40)$ 225,000
Market will grow (p = 0.70)$ 3,000,000
EV1 = $ 1,022,000 Expand EV6 = $ 2,310,000$ 1,510,000 - $ 800,000
Market will not grow (p = 0.30)Market will grow (p = 0.60) EV4 = $ 1,510,000 $ 700,000
Land will be sold$ 450,000
Market growth can occur (p = 0.30)Purchase the land EV3 = $ 1,222,000 $ 2,300,000
$ 1,022,000 - $ 200,000Warehouse will be constructed EV7 = $ 1,390,000$ 790,000 - $ 600,000
Maximum payoff No market growth can occur (p = 0.70)Market will not grow (p = 0.40) EV5 = $ 790,000 $ 1,000,000
Land will be sold$ 210,000
® Decision: Purchase the land
NAMA: YUNIA ISTIFANI NRP:F34120062
EV7 = $ 2,300,000 (0.30) + $ 1,000,000 (0.70) = $ 1,390,000EV6 = $ 3,000,000 (0.70) + $ 700,000 (0.30) = $ 2,310,000EV5 = MAX (($ 1,390,000 - $ 600,000 = $ 790,000) AND $ 210,000) = $ 790,000EV4 = MAX (($ 2,310,000 - $ 800,000 = $ 1,510,000) AND $ 450,000) = $ 1,510,000EV3 = $ 1,510,000 (0.60) + $ 790,000 (0.40) = $ 1,222,000EV2 = $ 2,000,000 (0.60) + $ 225,000 (0.40) = $ 1,290,000EV1 = MAX (($ 1,290,000 - $ 800,000 = $ 490,000) AND ($1,222,000 - $200,000 = $ 1,022,000)) = $ 1,022,000 (Purchase the land)
® Decision: Purchase the land
