An entrepreneur is planning to market a new brand of bottled unsweetened, organic iced tea. The revenue on each bottle of iced tea to be sold has been determined to be $2.47 The entrepeneur needs to decide on the size of of the bottling plan to produce the iced tea. A small bottling plant will have an annual operating cost of $118K and be able to fill 207K bottles per year. A large bottling plant will have an annual operating cost of $400K and be able to fill 508K bottles per year. Three levels of demand are considered likely: 10,000,100,000 and 500,000 bottles per year. Complete parts (a) through (i) below. A b. Construct a decision tree. Select the correct answer below and fill in the answer boxes to complete your choice. (Do not include the $ symbol in your answers.) c. Construct an opportunity loss table. A. Large plant B. Small plant A. Large plant 100,000 B. Small plant A. Large plant 500,000 B. Small plant d. Compute the expected monetary value (EMV) for choosing the small plant to build. EMV=$ e. Compute the expected opportunity loss (EOL) for choosing the small plant to build. EOL=$ f. Compute the return-to-risk ratio (RTRR) for choosing the small plant to build. RTRR = (Round to three decimal places as needed.) g. Compute the expected monetary value (EMV) for choosing the large plant to build. EMV=$ h. Compute the expected opportunity loss (EOL) for choosing the large plant to build. EOL=$ i. Compute the return-to-risk ratio (RTRR) for choosing the large plant to build. RTRR= (Round to three decimal places as needed.) An entrepreneur is planning to market a new brand of bottled unsweetened, organic iced tea. The revenue on each bottle of iced tea to be sold has been determined to be $2.47 The entrepeneur needs to decide on the size of of the bottling plan to produce the iced tea. A small bottling plant will have an annual operating cost of $118K and be able to fill 207K bottles per year. A large bottling plant will have an annual operating cost of $400K and be able to fill 508K bottles per year. Three levels of demand are considered likely: 10,000,100,000 and 500,000 bottles per year. Complete parts (a) through (i) below. A b. Construct a decision tree. Select the correct answer below and fill in the answer boxes to complete your choice. (Do not include the $ symbol in your answers.) c. Construct an opportunity loss table. A. Large plant B. Small plant A. Large plant 100,000 B. Small plant A. Large plant 500,000 B. Small plant d. Compute the expected monetary value (EMV) for choosing the small plant to build. EMV=$ e. Compute the expected opportunity loss (EOL) for choosing the small plant to build. EOL=$ f. Compute the return-to-risk ratio (RTRR) for choosing the small plant to build. RTRR = (Round to three decimal places as needed.) g. Compute the expected monetary value (EMV) for choosing the large plant to build. EMV=$ h. Compute the expected opportunity loss (EOL) for choosing the large plant to build. EOL=$ i. Compute the return-to-risk ratio (RTRR) for choosing the large plant to build. RTRR= (Round to three decimal places as needed.)
