Discussion 4: Chapter 58: Wawa (Expected Value of a Decision) If you've been a Wiwa customer for many years, it is likely you've seen certain locations remodeled, or totally rebuilt. These are expensive decisions! So the Wawa decision maker, usually someone high up in the organization, and often an investment committee, are going to spend a lot of money (usually a few million $) overhauling an existing location if the outcome will result in increased sales and/or profits. Otherwise why would they spend lots of money on an existing location, and simply use the money to build a new location? This kind of decision involves decision making under uncertainty, the most common type of investment decision scenario. So imagine you are a Wawa Regional President in charge of all locations in the State of Virginia. You have an existing location in Falls Church VA that was built 10 years ago, which does not currently have a gas station but has the land to remodel the existing building and also add gas pumps, etc You have three alternatives to consider: "No remodel" meaning leave the store as-ls, "Remodel store" meaning remodel the store only, or "Remodel + Gas meaning remodel the store AND add gas pumps. The payoff table for this investment decision is as follows: PROJECTED FUTURE ANNUAL SALES Alternative High No remodel $5M $7M $8M Remodel store $5M $8M $10M Remodel + Gas $14M Make one original post of at least 100 words to describe which of the four decision criteria from Chapter 55.5. you would apply and explain why. There is no perfectly right answer, there is only your choice and your explanation of why. If you need to make assumptions about other conditions, then offer those assumptions. You do not need to complete a response post. Rubric a highly graded post will be at least 100 words in length: a highly graded post will select one of the four "Under Uncertainty decision criterios a highly graded post will offer a logical reason as to why the selected criteria was chosen Low Medium $8M $10M Discussion 4: Chapter 58: Wawa (Expected Value of a Decision) If you've been a Wiwa customer for many years, it is likely you've seen certain locations remodeled, or totally rebuilt. These are expensive decisions! So the Wawa decision maker, usually someone high up in the organization, and often an investment committee, are going to spend a lot of money (usually a few million $) overhauling an existing location if the outcome will result in increased sales and/or profits. Otherwise why would they spend lots of money on an existing location, and simply use the money to build a new location? This kind of decision involves decision making under uncertainty, the most common type of investment decision scenario. So imagine you are a Wawa Regional President in charge of all locations in the State of Virginia. You have an existing location in Falls Church VA that was built 10 years ago, which does not currently have a gas station but has the land to remodel the existing building and also add gas pumps, etc You have three alternatives to consider: "No remodel" meaning leave the store as-ls, "Remodel store" meaning remodel the store only, or "Remodel + Gas meaning remodel the store AND add gas pumps. The payoff table for this investment decision is as follows: PROJECTED FUTURE ANNUAL SALES Alternative High No remodel $5M $7M $8M Remodel store $5M $8M $10M Remodel + Gas $14M Make one original post of at least 100 words to describe which of the four decision criteria from Chapter 55.5. you would apply and explain why. There is no perfectly right answer, there is only your choice and your explanation of why. If you need to make assumptions about other conditions, then offer those assumptions. You do not need to complete a response post. Rubric a highly graded post will be at least 100 words in length: a highly graded post will select one of the four "Under Uncertainty decision criterios a highly graded post will offer a logical reason as to why the selected criteria was chosen Low Medium $8M $10M
