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Tri-products is trying to decide whether to make-or-buy an accessory item for one of their products. It is projected that this item will sell for
Tri-products is trying to decide whether to make-or-buy an accessory item for one of their products. It is projected that this item will sell for $10 each. If the item is outsourced, there is virtually no cost other than the $6 per unit that they would pay their supplier. Internally, they have two choices. equipment, but results in a $4 per unit cost. but its per unit cost is $5. Regardless of whether the item is subcontracted or produced internally, there is a 60% chance that they will sell 50,000 units, and a 40% chance that they will sell 100,000 units. Draw the decision tree appropriate to the alternatives and outcomes stated. Using decision trees and EMV, what is their best choice? Process A requires an investment of $120,000 for design and Process B requires only a $100,000 investment,
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