M16/3/BUSMT/HP2/ENG/TZOXXIM {(b) Construct a fully labelled decision tee, calculate the predicted outcome for each ‘option and ideniy the best option for AC (show all your working). (6 Probaitty Ferveat centO48 5170900 ance 1000 Pe Paes EMV 1=(1700000x0.45 + 850000x0.55) 990000 = $7500 EMV2a = (1000000 0.60 + 250000040) ~ 450000 = $250000 -EMv2b = (1250000.x0.60 + 200000x0.40} 475008 $355000 Best option: 2b buy new machinery with traning to produce more ofthe current products, fo) The decision tree does not reach a standard described below. 11-2) The decision tree isnot accurately constructed, and/or the celeuatons of each ‘option are not presented or accurate. However, thore is somo evidence of @ general understending of the model By Ths principal elements ofthe decision tree are constructed, but may not be centrely accurate. The calculations of each option are largely correct. Allow up to two mistakes in calculations and / or presentation for [3]. ‘Allow for either one error in calculation or one error in presentation [4]. For an accurately constructed decision tree with incorrect calculations, award up to a maximum of [3). For an accuretely constructed decision tree with EMV caleulations, but no working (4). 5-4 The decision tre is accurately constructed. The calculations of each option are correct and wel presented. A key is provided. Workings are shown, As well 2s the rejected options [6]. Full marks can be awarded even if the headings of expected returorecast revenue and probabilties ae not explily writen. N.B. for ony correct calculations of all options without a decision tree award @ ‘maximum of [2]. ‘Apply candidate own gure rule (OFR) throughout this response,