SUBDOMAIN 309.3 – QUANTITATIVE ANALYSIS

Competency 309.3.3: Expected Value Decision Analysis – The graduate uses expected value concepts as decision-making tools.

Objective 309.3.3-04: Determine for a given decision tree which decision branch has the most favorable total expected value.

——————————————————————————–

Introduction: A company is considering alternatives for improving profits: develop new products or consolidate existing products. If the company decides to develop new products, it can either develop several products rapidly or take time to develop a few products more thoroughly. If the company chooses to consolidate existing products, it can either strengthen the products to improve profits or simply reap whatever gains are attainable without investing more time and money in the products.

Given: The “Decision Tree Chart” attachment shows the predicted gains from each decision alternative described above. Gains depend on how the market reacts to the action taken by the company. The probability of each market reaction is shown on the decision tree.

Click here for more on this paper…….

Task: Develop a response to the attached decision tree chart in which you do the following: A. Calculate the expected value for each of the four decision branches, showing all work or reasoning. B. Determine the decision alternative that has the most favorable total expected value. 1. Explain how you reached your determination in part B, comparing the results from the 4 decisions branches from part A. C. When you use sources, include all in-text citations and references in APA format.

Note: To reduce unnecessary matches select ignore “small matches <20 words” and “bibliography”.

Note: For definitions of terms commonly used in the rubric, see the attached Rubric Terms.

Note: When using sources to support ideas and elements in a paper or project, the submission MUST include APA formatted in-text citations with a corresponding reference list for any direct quotes or paraphrasing. It is not necessary to list sources that were consulted if they have not been quoted or paraphrased in the text of the paper or project.

Note: No more than a combined total of 30% of a submission can be directly quoted or closely paraphrased from sources, even if cited correctly. For tips on using APA style, please refer to the APA Handout web link included in the General Instructions section.

Click here for more on this paper…….