Determine the expected value for each of the four decision branches.


A company is considering alternatives for improving profits: either develop new products or consolidate existing products. If the company decides to develop new products, it can either develop several products rapidly or take time to develop a few products more thoroughly. If the company chooses to consolidate existing products, it can either strengthen the products to improve profits or simply reap whatever gains are attainable without investing more time and money into the products.


The decision tree chart provided in the attached “QAT1 Task 5 Spreadsheet” shows the predicted gains from each decision alternative described above. Gains depend on how the market reacts to the action taken by the company. The probability of each market reaction is shown on the decision tree.

A.  Develop a response to the decision tree chart from the attached “QAT1 Task 5 Spreadsheet” in which you do the following:

1.  Determine the expected value for each of the four decision branches.

a.  Describe the process used to reach the solutions you determined in part A1.

2.  Determine the decision alternative that has the most favorable expected value.

a.  Compare the expected values of the decision alternatives.

B.  When you use sources, include all in-text citations and references in APA format.

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