Question
PT XY is a distributor of MedHeal brand masks that sells various types of masks. The type of KN95 mask is a mask that is
PT XY is a distributor of MedHeal brand masks that sells various types of masks. The type of KN95 mask is a mask that is very in demand in the market in the conditions of the Omicron Covid-19 pandemic in 2021. At its peak, the pandemic in April 2020 reached 40% of the total sales of masks on the market. However, in February 2021 sales fell sharply and only dominated 9%. Based on these conditions, the company wants to conduct a study with the following alternatives:
1. Develop products with product development costs.
2. Continuing business as usual without product development.
3. Do nothing.
Based on the results of meetings and coordination with the management team within the company, some of the conditions in each study are as follows:
Alternative 1:
The probability of successful product development is 80%, while the chance of failure is 20%, and based on information from the sales division when a new product is marketed, the sales rate is high by 90% (company profit 50 million USD) and low sales 10% (company loss 81 million USD) while if it does not market a new product, the company's loss is 5 million IDR. If you continue to market your old products, the high sales rate is only 30% (the company's profit is 35 million USD) and the low sales are 70% (the company's loss is 20 million USD) while if you stop selling the old product, the company will lose 5 million USD.
Alternative 2:
Resuming to continue business without product development by marketing old products where the sales rate is high by 30% (company profit of 40 million USD) and low sales rate of 70% (company loss of 81 million USD).
Alternative 3:
Doing nothing the company experiences neither gains nor losses. Q: You as a consultant at the company are asked to describe a decision tree and provide the best choice to the owner of the company, which alternative is the best decision for the company to take? Provides the calculation!
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