Question
op-en-wakker Limited is a company in the clothing industry with a number of chain stores' At present the company is very inactive in the Western
op-en-wakker Limited is a company in the clothing industry with a number of chain stores' At present the company is very inactive in the Western Cape and would like to expand to this marketing area. The .u.np"ny must take a decision on the size of their first shop in the Western Cape. Onc"e the shop has been erected an extensive advertising campaign will be instituted' This will coit N$50 000 and will have an 85% chance favourable results. The management calculates that there is a40o/o chance of the company dominating a lage share of the market with their new shop and a 60%o chance that an average market penetration will be achieved. If a large share of the market is captured, a large shop will be needed.'fhis will cost N$8000 000 to erect ;ci will yield an annual estimated profit of N$13000 000. If an average share of the market is obtained, a smaller shop costing N$500O 000 will be required which will yield an annual estimated profit of N$8000 000. ih" .o*prrry can also build a small shop, wait for the results of the advertising campaign and then ifnecessary enlarge the shop at a cost ofN$4500 000' UIRED Draw up com n a decision tree for should take. the company and determine what action the company should take
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