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2 marksDecision Making

CAPE Management of Business Unit 1 · 2006 · Paper 2 · Question 2(a)(iii)

John, the Production Manager of Carib Incorporated, is choosing between locating a production plant in Moonlight Island or Sunny Isle, with given probability distributions for demand levels and associated payoffs.

Recommend to John the country in which he should locate the production plant, and explain why.

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Other parts of this question

  1. 2(a)(i)Draw a Decision Tree to illustrate the given scenario.[9 marks]
  2. 2(a)(ii)(a)Calculate the expected value for Moonlight Island.[2 marks]
  3. 2(a)(ii)(b)Calculate the expected value for Sunny Isle.[2 marks]
  4. 2(b)(i)Define "Network Analysis".[2 marks]
  5. 2(b)(ii)Outline two advantages and two disadvantages of using Critical Path Analysis as a decision-making tool.[8 marks]

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