Decision Tree

10/15/21, 3:30 PM Originality Report

https://lms.seu.edu.sa/webapps/mdb-sa-BBLEARN/originalityReport/ultra?attemptId=ae6bec74-6e04-4574-943b-8b2cd84555b4&course_id=_93096_… 2/6

investors examine Option A, they may conclude that it is the best option for them and that they should purchase the new cooker, which can offer a significant return in terms of higher income after expenses. In terms of net returns, the option with the most excellent Expected Monetary Value should be chosen. The choice

with the most significant anticipated return value is the best (Kamiski et al., 2018). Because of the approach's potential consequences, which need substantial invest- ment, Edloin and colleagues think it is the most cost-effective of all feasible options. When the expected impact on the miller's financial position is considered, it is de- termined to be the most cost-effective option available (2015). The choice to purchase new equipment involves financial risk. The decision's possible drawbacks are primarily focused on capital expense. The capital cost associated with the y option is SAR 3,750,000. In most cases, the initial price of an investment is very

high. The ruling may result in a lump sum payment of up to SAR 5,625,000. However, the choice may go wrong, resulting in a pay-off that costs the business money. There is a danger that the ruling will result in a three-million-dollar windfall. As a result, the investor would suffer a loss of SAR 750, 000. Risks and return rates influ- ence an investor's investing choice at any moment. Decisions that have the potential to generate large profit margins are also fraught with danger. However, if the risk is quantifiable and the investor is willing to accept it, they may be able to make a decision that results in significant gains. Choice A is the most advantageous invest- ment option since it has the most critical potential for return. The Appendix provides a summary of the decision's outcome. Large-scale investment efforts help

the business. Large-scale investments are more lucrative due to economies of scale and lower manufacturing costs (Stevenson, 2018). Large-scale investments have lower manufacturing costs than smaller-scale ones. Transportation, supplier price, and other production utilities may all be used to decrease manufacturing costs. If a business has the financial resources to invest in large-scale capacity, this is often a feasible alternative to consider. Explained the decision's outcome Large-scale in- vestment efforts help the business. Large-scale investments are more lucrative due to economies of scale and lower manufacturing costs (Stevenson, 2018). Large- scale investments have lower manufacturing costs than smaller-scale ones. Transportation, supplier price, and other production utilities may all be used to decrease manufacturing costs. It is typically the sensible course of action when a business has the financial means to invest in large-scale capacity. Furthermore, the investor may choose to make no modifications. If no changes occur, the investor will incur no extra costs as a result of their investments. Furthermore, no reimbursements will be given. Any investor wants to see their business grow and enhance its financial performance (Rohrich, 2007).

3

4 3

9

3

Choosing not to invest in or adapt to new developments and trends jeopardizes a company's future success. Customers are turned away because previous patterns do not match the consumer's current wants and ambitions. In most instances, it leads to financial losses, decreased clients, and poor market competitiveness. Any in- vestor should be willing to put their money and resources at risk to effect good change that generates income. In a similar vein, the investor must be willing to put money and resources worth about SAR 3,750,000 at risk to reap the benefits of this investment. If thorough market research is conducted and changes are effectively implemented, the investment can generate SAR 5,625,000 in returns. Making financial choices may be difficult. Weighing risk, reward, and obligations is an excellent way to choose the optimal investment choice. The option is worthwhile if the risk is quantifiable and the tips are still desired when all other variables stay constant. The decision tree assists the investor in choosing whether to purchase a new machine, repair an existing appliance, or keep the equipment. The decision is based on the size of the market for the company's products or services. Customers who are already dissatisfied, as previously mentioned, will be pushed to a lower level of sat- isfaction by the outmoded technology. Then they should investigate options. According to A. Magee (2014), "if a business builds a large factory, it must equip it with excellent facilities to match the scale of market demand" and increase profit margins. A decision tree, which has excellent potential as a decision-making tool in

an investment scenario, explains for management the choices accessible to them, the dangers they confront, the goals they want to achieve, the monetary gains they hope to attain, and the information needs they have. The decision tree depicted the relationship between present planning and future occurrences, as well as near- future alternatives. It provides more comfort and clarity while evaluating various courses of action by offering a simple analytical method. It demonstrates how capital investment choices are considered, but it is not intended to provide definitive solutions to management's worries about making investment decisions in the face of uncertainty.

Developing a Decision Tree

Develop a decision tree for

the case described.

Decision

Large Scale investment (A)

9, 375,000

40%

9, 375, 000

60%

3 000, 000

Small Scale investment (B)

9, 375,000

30%

(3, 750,000)

70%

(1, 875,000)

NO change (C)

Developing a Decision Tree Develop a decision tree for the case described.

3

10

11

8

3

3

2

9

3

5

3

1

10/15/21, 3:30 PM Originality Report

https://lms.seu.edu.sa/webapps/mdb-sa-BBLEARN/originalityReport/ultra?attemptId=ae6bec74-6e04-4574-943b-8b2cd84555b4&course_id=_93096_… 3/6

Source Matches (35)

Student paper 76%

Student paper 88%

Student paper 100%

Student paper 72%

Student paper 75%

Student paper 69%

Student paper 84%

Student paper 100%

Decision Large Scale investment (A) 9, 375,000

40% 9, 375, 000 60% 3 000, 000 Small Scale investment (B) 9, 375,000

30% (3, 750,000) 70% (1, 875,000) NO change (C)

4

8

1

Student paper

Developing a Decision Tree Develop a decision tree for the case described.

Original source

Develop a decision tree for the case described

2

Student paper

40% 9, 375, 000

Original source

40% 9,375,000 SAR

3

Student paper

60% 3 000, 000

Original source

60% 3,000,000

4

Student paper

Large Scale investment (A) 9, 375,000

Original source

9,375,000 SAR Investment

5

Student paper

30% (3, 750,000) Decision

Original source

• 3,750,000

4

Student paper

Small Scale investment (B) 9, 375,000

Original source

9,375,000 SAR Investment

3

Student paper

70% (1, 875,000)

Original source

1,875,000

1

Student paper

Explain The Process of Developing a Decision Tree, Draw the Decision Tree (Include the Decision Tree in an Appendix Showing Chance Nodes, Probabilities, Outcomes, Expected Values, And Net Expected Value).

Original source

Explain the process of developing a decision tree, draw the decision tree (include the de- cision tree in an appendix showing chance nodes, probabilities, outcomes, expected val- ues, and net expected value)