To obtain full credit for question1, however, you will need to comprehensively answer and describe the relevant decision variables and the constraints in the context of the given business scenario.
So to re-cap, no graph is needed. Just produce a paragraph to identify and discuss the objective, decision variables, and constraints.
The label for city would go in the cell highlighted in Blue.
The outcome, e.g. "High Sales" would go into the yellow cell
Your probability for an outcome is entered in the green cell
The value of the outcome is placed in the purple cell
After this is entered your EMV should show up in your pink cell
The above is really the same as the discussion in Chapter 8. The template just allows you to skip over installing the TreePlan tool.
So, yes, the alternatives are the cities. The last is the "Do nothing" option.
You will have to determine what your marketing plan needs to be. When you do that, think about what the related probabilities would be. These will have to be chosen based upon your plan and instincts. There is not a path to calculate them with what we have.
My write-up gave some guidance on how you might go about getting the High, Average, and Low numbers. The average can be calculated. For the high, you need to decide what your marketing plan is...then apply some top limit for sales. I recommended that perhaps the extra capacity from the model could be used to bump up the total sales for a wine type. But, you do not have to take this route. Come up with a marketing plan, make some assumptions, and formulate your values from there.
The Solver is not involved in the decision tree. The numbers you type in the cells will drive the embedded formulas in the template to fold back the EMV.
Note: If you go into the template into a cell and there is a formula, you are trying to update the wrong cell. Be careful!
clark786
milestone_4_notes_2.docx
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