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Gemini Designs makes new uber smartwatches. The retail cost of the smartwatch is $280.00 each. There are three designs for the smartwatch which has
Gemini Designs makes new uber smartwatches. The retail cost of the smartwatch is $280.00 each. There are three designs for the smartwatch which has an forecasted sales of 980,000 units throughout the product's life. Design A has a design cost of $57,000; Design B has a design cost of $45,000; Design C has a design cost of $57,500. The following table shows the Yield rate for each design. Design Model A B Probability of Yielding a Good Smart Watch during Manufacturing Yield 30 per 50 Yield 39 per 50 0.62 0.22 0.75 0.38 0.78 0.25 Manufacturing cost per watch for all watches in the design model a. Draw a decision tree which shows Root, Branches and nodes for decisions above b. Solve the EMV for each design model. c. Which design should the company choose? $5.44 $6.91 $6.11
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