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Decision Tree

The document discusses expanding a small plant or building a large plant based on projected demand. A small plant expansion would cost $1.5 million but could only produce up to 300,000 units, while a large plant costs $2 million but can produce up to 600,000 units. There is a 70% chance of high demand requiring the larger capacity and a 30% chance of low demand where the smaller plant would be sufficient.

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Usmän Mïrżä
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47 views

Decision Tree

The document discusses expanding a small plant or building a large plant based on projected demand. A small plant expansion would cost $1.5 million but could only produce up to 300,000 units, while a large plant costs $2 million but can produce up to 600,000 units. There is a 70% chance of high demand requiring the larger capacity and a 30% chance of low demand where the smaller plant would be sufficient.

Uploaded by

Usmän Mïrżä
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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300,000

High Demand
70%

70% 600,000

Small Plant
Expansion Cost 1.5M
Cost 2 M

Low Demand 30% 150,000

30%
500,000 100,000
High Demand
70%
Large Plant
Cost 2 M

Low Demand 30%


100,000

Do Not Expanded

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