Please create a decision tree in excel - its question 3 in the attached document.

Decision trees are another important if challenging world-class operations management method which operations managers should understand and with which other managers should be familiar.

This exercise illustrates how using a decision tree, determination of an "optimal" production capacity option can be made from among several possible capacity options based on the provided probable market demand and expected costs/payoffs of events that influence the options.

It is spring 2000, and TMMC has indeed just been chosen to produce the new Lexus RX 330 line, with the first units deliverable in 2003. Toyota must now determine the amount of annual production capacity it should build at TMMC.

Toyota's goal is to maximize the profit from the RX 330 line over the five years from 2003-2007. These vehicles will sell for an average of $37,000 and incur a mean unit production cost of $28,000 (here, $ = the Canadian dollar).

10,000 units of annual production capacity can be built for $50M () with additional blocks of 5,000 units of annual capacity each costing $15M. Each block of 5,000 units of capacity will also cost $5M per year to maintain, even if the capacity is unused.

Assume that the number of units actually sold each year will be the lesser of the demand and the production capacity.

Marketing has provided three vehicle estimated demand scenarios with associated probabilities as follows:

Demand	2003	2004	2005	2006	2007	Probability
Low	10,000	10,500	11,000	11,500	12,000	0.25
Moderate	15,000	16,000	17,000	18,000	19,000	0.50
High	20,000	24,000	26,000	28,000	30,000	0.25

Planning Production for Toyota North America Lexus RX 350, Successor in 2007 to the RX 330 Photo courtesy of Toyota Motor Company Assignment Taskings Address the following four exercises: Exercise 1: Making a Critical Assessment of the Toyota Production System (TPS) Today a. Demonstrate your team's basic understanding of the TPS by 1) defining in your team's own words any eight of the terms found athttp://www.toyotageorgetown.com/terms.asp, and 2) applying them to one or more of your team's own companies or other organizations. For example, Pokayoke can be defined as an approach to create mistake proofing through use of devices that detect or prevent production errors. At a software development firm, pokayoke might be applied through use of a modular development process that includes extensive software module testing before proceeding to module integration and total system testing. b. Describe the TPS as a total entity. What are its purposes? Its advantages? Its limitations? How is it now evolving? Is it getting better - or not? Has it been successfully copied by other motor vehicle manufacturers? Why or why not? Exercise 2: Use of a Grid Analysis (Weighted Scoring Model) to Help Make the North American Plant Location Decision for the RX 330 This exercise illustrates how when deciding among two or more competing plant location options, various decision factors (which can typically be characterized as exogenous - in a company's external environment - or endogenous - internal to the company) can be qualitatively identified, and how these factors can then be weighted to obtain an overall score for each competing location option. a. List the factors your team considers key to the Toyota Motor Manufacturing Canada (TMMC): The Lexus RX 330 Line North American plant location decision, identifying these factors as either exogenous or endogenous, weighting them using your team's best judgment (stating any relevant assumptions or constraints), and assigning two scores to each factor: one for production of the Lexus RX 330 at TMMC, and one for production at a Toyota factory in the USA. b. Using the scores from your team's weighted scoring model and working with regard to Ringo Sho and Nemawashi, make and support your recommendation for the RX 330 North American plant location - TMMC or a factory in the USA. Exercise 3: Determining Production Capacity Needed at Toyota Motor Manufacturing of Canada (TMMC) Decision trees are another important if challenging world-class operations management method which operations managers should understand and with which other managers should be familiar. This exercise illustrates how using a decision tree, determination of an "optimal" production capacity option can be made from among several possible capacity options based on the provided probable market demand and expected costs/payoffs of events that influence the options. It is spring 2000, and TMMC has indeed just been chosen to produce the new Lexus RX 330 line, with the first units deliverable in 2003. Toyota must now determine the amount of annual production capacity it should build at TMMC. Toyota's goal is to maximize the profit from the RX 330 line over the five years from 2003-2007. These vehicles will sell for an average of $37,000 and incur a mean unit production cost of $28,000 (here, $ = the Canadian dollar). 10,000 units of annual production capacity can be built for $50M (M=million) with additional blocks of 5,000 units of annual capacity each costing $15M. Each block of 5,000 units of capacity will also cost $5M per year to maintain, even if the capacity is unused. Assume that the number of units actually sold each year will be the lesser of the demand and the production capacity. Marketing has provided three vehicle estimated demand scenarios with associated probabilities as follows: Probabilit Demand 2003 2004 2005 2006 2007 y 10,00 10,50 11,00 11,50 12,00 Low 0.25 0 0 0 0 0 Moderat 15,00 16,00 17,00 18,00 19,00 0.50 e 0 0 0 0 0 20,00 24,00 26,00 28,00 30,00 High 0.25 0 0 0 0 0 a. To maximize profit earned during this period, which production capacity should TMMC in 2000 decide to build - 10,000, 15,000, 20,000, 25,000, or 30,000 cars? Justify your choice. You may use the following decision tree developed by Toyota operations analysts in Toyota City, Japan or your group may choose to vary it in some way based, perhaps, on its presumed better local market knowledge. b. What are the weaknesses or limitations in this analysis? How might they be corrected or at least reduced? c. It is now late 2016. How well has the RX-330/350 actually done in the North American market? Is its quality rated as high as if it were made in Japan? Do some online research; it's part of improving your attainment of Information Literacy, one of the UMUC MBA Competencies. Here see the Content/Week 10 references on Grid Analysis and Decision Trees Exercise 4: Assessment of Toyota's Current Regional Production Strategy North America Source:www.worldatlas.com/webimage/countrysa.htm, a. After doing necessary research online or otherwise, document and evaluate the current distribution of Toyota production in North America. Here be sure to include Mexico. b. Why does the team believe Toyota has chosen to produce its cars in the current manner? Has Toyota been wise, or not? Introduction - page Executive Summary - 1 page Definitions - 2 pages Weighted Scoring - 2 pages Exercise 3. Optimizing Production Capacity at TMMC (Canada) - 2 pages Calculations and Assumptions - 2 pages Conclusion - page