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Please fully answer and make sure its correct, will upvote if done correctly. Thank you! Bosch is deciding whether to locate a new manufacturing facility
Please fully answer and make sure its correct, will upvote if done correctly. Thank you!
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 313,000 units per year. - In Brazil, the annual fixed cost of production is $1.1 million and the profit margin per unit is $33. - In Germany, the annual fixed cost of production is $3.5 million and the profit margin per unit is $46 - The annual demand that will be served by the facility is uncertain - With probability 0.5 the demand will be high at a value of 368,000 units. - Otherwise, the demand will be low at a value of 112,000 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 3 decimal places. - Enter your final answer in dollars rounded to the nearest dollar. 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 313,000 units per year. - In Brazil, the annual fixed cost of production is $1.1 million and the profit margin per unit is $33. - In Germany, the annual fixed cost of production is $3.5 million and the profit margin per unit is $46 - The annual demand that will be served by the facility is uncertain - With probability 0.5 the demand will be high at a value of 368,000 units. - Otherwise, the demand will be low at a value of 112,000 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 3 decimal places. - Enter your final answer in dollars rounded to the nearest dollarStep by Step Solution
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