"Your business in Melbourne is doing very well, and you are now in the position to expand and set up another outlet in either Sydney or Brisbane. Current earning is $120 per year and current overhead is $50 per year."
"If you set up outlet in Sydney, there is a 37% chance that the economy in Sydney will do well, a 29% chance that the economy will remain the same, and a 34o/o chance that Sydney's ecornomy does bad."
"If Sydney's economy is doing well, there is a 70% chance that the Sydney outlet will earn a huge profit of $500 and a 30% chance it will earn a gross profit of $210. If Sydney's economy stays the same, the outlet will probably earn a gross profit of $90. If the economy goes bad, the gross profit will probably be $30 ."
"If you set up outlet in Brisbane, there is a 34% chance that the economy in Brisbane will do well, a 33°10 chance that the economy will remain the same, and a 33% chance that Brisbane ·s economy does bad."
"If Brisbane's economy is doing well, the Brisbane outlet will earn 70°10 higher than the current earning. If economy stays the same, there is 65% chance the Brisbane outlet will probably earn a gross profit of $180 and 35% chance of earning $155. If the economy goes bad, the gross profit will probably be only 50% of current earning."
The Sydney outlet overhead is estimated to be $60 per year and for Brisbane outlet is $45 per year.
"Using Decision Tree Analysis, which option is better? Sydney or Brisbane location?"
NOTE: You may do this calculation manually on paper by hand. You then take a photo of the manual calculation and attached it in the Answer space below.