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MJ Logistics has decided to build a new warehouse to support its supply chain activities. They have the option of building either a large warehouse or a small one Construction costs for the large

MJ Logistics has decided to build a new warehouse to support its supply chain activities. They have the option of building either a large warehouse or a small one Construction costs for the large

MJ Logistics has decided to build a new warehouse to support its supply chain activities. They have the option of building either a large warehouse or a small one.Construction costs for the large facility are R8 million versus R5 million for the small facility. The profit (excluding construction cost) depends on the volume of work the company expects to contract for in the future. This is summarized in the table below (in millions of rand):High VolumeLow VolumeLarge WarehouseR35R20Small WarehouseR15R9The company believes that there is a 60% chance that the volume of demand will be high.a) Construct a decision tree to identify the best choice.

Tripti 01-Sep-2020

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