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Your Initials 2. A total of 5000 mechanical subassemblies are needed annually on a final assembly line. The subassemblies can be obtained in one of

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Your Initials 2. A total of 5000 mechanical subassemblies are needed annually on a final assembly line. The subassemblies can be obtained in one of three ways: (1) Make them in one of three plants owned by the company; (2) buy them off the shelf from the one and only manufacturer; or (3) contract to have them made to specifications by a vendor. The estimated annual cost for each alternative is dependent upon specific eircumstances of the plant, manufacturer, or contractor. The information shown in the table below details the eircumstance, a probability of occurrence, and the estimated annual cost. Costruet a decision tree, then determine the best alternative by calculating the expected cost of each alternative and selecting the least cost alternative. (25 points) Decision Annual Cost for 5000 Units, S/year Outcomes Probability I. Make Plant 0.3 0.5 0.2 -250,000 400,000 -350,000 2. Buy off the shelf Quantity: 5000, forced to buy 0.2 0.7 0.1 -550,00 -250,000 -290,000 3. Contract Delivery: Timely delivery Late delivery; then buy some off shelf 0.5 0.5 -175.000 -450,000

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