Question
Solve using SilverDecisions or Excel - Step by Step. SOL.E manufactures solar energy panels in MA. The company has received an order for 40 panels
Solve using SilverDecisions or Excel - Step by Step. SOL.E manufactures solar energy panels in MA. The company has received an order for 40 panels from a New Mexico customer which is willing to pay 1,000$ per panel. SOL.E has committed its production capacity to other orders, and the only alternative left to serve the new order is to subcontract it. SOL.E has located two possible suppliers: Supplier A, based in Kansas, which would sell SOL.E each panel for $500; Supplier B, from Texas, which would sell each panel for $550. The cost to transport one batch of 40 panels from either of the two suppliers to the New Mexico is $1,000. Nonetheless, the customers technical specifications are very demanding, so SOL.E estimates that Supplier A could supply one correct batch with a probability of 70 %, whereas Supplier B could do it with a probability of 80 %. If the batch were incorrect, SOL.E could sell it to another customer at the price of 200$ per panel. SOL.E is considering the possibility of asking for a test panel from each supplier to test it before placing an order. SOL.Es testing system guarantees that a faulty panel is always detected, while there is a 5 % margin of error with correct panels. The testing system is prepared to assess two test panels, and the overall cost (cost of the two panels, transport, cost of the test) comes to 2,000$. Using decision tree come up with a cost-effective plan for SOL.E to satisfy the urgent order for 40 panels.
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