Homework
Instructions
Vasco da Gama Industries is deciding whether to make or outsource the new batteries that will power its new Hydro Bat-Boat. Guy Josobo is the CEO, and he runs all the production management for the project. He has determined the following costs: Respectively the amounts are $-20,000 (lose money) low, $40,000 medium, and $100,000 high demand to produce at Vasco da Gama. To outsource the project, he has determined the following costs: $10,000 low, $45,000 medium, and $70,000 high demand.
Using this information, complete the following steps:
• Develop a decision tree or decision-tree chart to solve Guy Josobo's dilemma.
• At each decision node, select the best decision alternative for both the manufacture and outsource choices.
• Determine the state of probabilities for all the demands: low demand is .30, medium demand is .45, and high demand is .25.
• Using your decision tree and states of probabilities, calculate the cost at each outcome node, and determine the best solution.
• Show all your work for these steps.
• Describe and justify the steps in a decision tree analysis that Guy Josobo performed for Vasco da Gama Industries, and include any possible challenges he will face.
• Explain what decision Guy Josobo should make, and explain your reasoning.
Format your homework according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, and typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the homework, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.