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8 marksProject Management

CAPE Management of Business Unit 2 · 2009 · Paper 2 · Question 2(b)(i)

Mr. Opportunity considers investing in a garment factory, deciding between building a small or large factory, with options and payoffs given in a decision tree.

Using the decision tree, sequentially analyze the decisions Mr. Opportunity needs to make at EACH step.

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Other parts of this question

  1. 2(a)Forecasting serves as the basis for planning. Outline THREE advantages and THREE disadvantages of the Delphi method as a forecasting technique.[12 marks]
  2. 2(b)(ii)a)Calculate the highest expected value for building a small factory.[2 marks]
  3. 2(b)(ii)b)Calculate the highest expected value for building a large factory.[2 marks]
  4. 2(b)(iii)Determine which alternative Mr. Opportunity must choose if he is to maximize expected monetary returns.[1 mark]

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