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The product design group of Flores Electric Supplies has determined that it needs to design a new series of switches. It must decide on one
The product design group of Flores Electric Supplies has determined that it needs to design a new series of switches. It
must decide on one of two design strategies. The market forecast is for switches.
Lowtech: This option has a fixed cost of $ and variable costs per switch of; $ with a probability of $
with a probability of and $
Hightech: This option has a fixed cost of $ and variable costs per switch of; $ with a probability of and
$
a Construct a decision tree for this scenario. Include cost estimates at each leaf of the tree. marks
b Use expected value analysis to determine what design strategy the company should use. marks
E
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