This paper circulates around the core theme of A local supermarket is planning to expand its business. There are three possible options: together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 48. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
A local supermarket is planning to expand its business. There are three possible options:
• • Option 1: set up a new store,
• • Option 2: develop online shopping, or
• • Option 3: expand the current store.
A consultant estimated that setting up a new store will cost $600,000, developing online shopping will cost $200,000 and expanding the current store will cost $300,000. The potential revenues in the future 3 years together with the estimated probabilities are given in the Table below:
Option Revenue ($) Probability (%)
Option 1 1,100,000 30
Option 2 700,000 20
Option 3 800,000 55
Use these data and the decision tree analysis technique to determine which of the options is preferable. Your solution should include a well-labelled decision tree, all relevant calculations, your decision and a clear justification of your decision. [NOTE: it is not necessary for the explanation to be lengthy, but it must be correct and easily understood.]