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Bosch is deciding whether to locate a new manufacturing facility for its power tools in Brazil or Germany. At either location, the facility will be
Bosch is deciding whether to locate a new manufacturing facility for its power tools in Brazil or
Germany.
At either location, the facility will be designed to be able to produce up to ?units per
year.
In Brazil, the annual fixed cost of production is $ ?million and the profit margin per unit is $
In Germany, the annual fixed cost of production is $ ?million and the profit margin per unit is
$
The annual demand that will be served by the facility is uncertain
With probability ?the demand will be high at a value of ?units.
Otherwise, the demand will be low at a value of ?units.
Draw a decision tree to analyze this problem.
Calculate the expected annual profit if the facility is located in Brazil.
Calculate the expected annual profit if the facility is located in Germany.
Which of the two options does Bosch prefer?
Enter the absolute difference between the expected annual profits of the two options.
Carry all calculations to at least ?decimal places.
Enter your final answer in dollars rounded to the nearest dollar. please fully answer and be sure answer is correct, will upvote if done correctly
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