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WGU C207 Task 2 | Latest Update with
Complete Solution
DECISION TREE ANALYSIS
Course: C207
Table..of..Contents
A. Business..question..for..“Decision..Tree..Analysis..Resources" .....................................................3
B. The..relevant..data..values..for..the..decision..tree..analysis..............................................................3
C. Report..of..data..analysis..using..decision..tree..analysis .................................................................4
1. Decision..tree..diagram .............................................................................................................4
2. Justification ...............................................................................................................................4
D. Implications..of..Decision..tree..analysis .......................................................................................4
1. The..role..of..probabilities..and..the..role..of..demand ...................................................................4
2. Explanation..of..the..expected..value .........................................................................................5
3. Limitation ................................................................................................................................5
E. Recommend..action .....................................................................................................................6
References ........................................................................................................................................7
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A. Business..question..for..“Decision..Tree..Analysis..Resources"
The..business..question..is.."What..strategic..route..should..MPC..take..to..maximize..the..expe
cted..profit..given..a..level..of..uncertainty..in..the..market..such..as..new..product..development,..new..a
pplications..for..existing..drugs,..or..just..continuing..with..existing..products?"
This..question..can..be..constructed..for..decision..tree..analysis..because:
● There..are..three..clearly..defined..strategic..alternatives.
● There..is..uncertainty..concerning..market..conditions..(favorable..versus..unfavorable).
● This..can..estimate..probabilities..regarding..success..rates.
● This..has..hard..data..on..the..outcomes,..namely..demand..and..profit/unit.
● This..decision..is..being..made..sequentially..(market..conditions..and..success..rates).
B. The..relevant..data..values..for..the..decision..tree..analysis
The..relevant..data..values..for..the..decision..tree..analysis..are..presented..in..the..table..below:
Strategy Market..C Success.. Demand..(units/ Profit..per Monthly
ondition Probabili month) ..Unit ..Payoff
..ty
New..Drug..Line Favorable 71% 4,341 $0.63 $2,734.83
New..Drug..Line Unfavorable 29% 1,205 $0.63 $759.15
Existing..Drug..Line Favorable 63% 5,475 $0.48 $2,628.00
Existing..Drug..Line Unfavorable 37% 1,807 $0.48 $867.36
No..Changes Favorable 81% 730 $0.84 $613.20
No..Changes Unfavorable 19% 241 $0.84 $202.44
WGU C207 Task 2 | Latest Update with
Complete Solution
DECISION TREE ANALYSIS
Course: C207
Table..of..Contents
A. Business..question..for..“Decision..Tree..Analysis..Resources" .....................................................3
B. The..relevant..data..values..for..the..decision..tree..analysis..............................................................3
C. Report..of..data..analysis..using..decision..tree..analysis .................................................................4
1. Decision..tree..diagram .............................................................................................................4
2. Justification ...............................................................................................................................4
D. Implications..of..Decision..tree..analysis .......................................................................................4
1. The..role..of..probabilities..and..the..role..of..demand ...................................................................4
2. Explanation..of..the..expected..value .........................................................................................5
3. Limitation ................................................................................................................................5
E. Recommend..action .....................................................................................................................6
References ........................................................................................................................................7
, 3
A. Business..question..for..“Decision..Tree..Analysis..Resources"
The..business..question..is.."What..strategic..route..should..MPC..take..to..maximize..the..expe
cted..profit..given..a..level..of..uncertainty..in..the..market..such..as..new..product..development,..new..a
pplications..for..existing..drugs,..or..just..continuing..with..existing..products?"
This..question..can..be..constructed..for..decision..tree..analysis..because:
● There..are..three..clearly..defined..strategic..alternatives.
● There..is..uncertainty..concerning..market..conditions..(favorable..versus..unfavorable).
● This..can..estimate..probabilities..regarding..success..rates.
● This..has..hard..data..on..the..outcomes,..namely..demand..and..profit/unit.
● This..decision..is..being..made..sequentially..(market..conditions..and..success..rates).
B. The..relevant..data..values..for..the..decision..tree..analysis
The..relevant..data..values..for..the..decision..tree..analysis..are..presented..in..the..table..below:
Strategy Market..C Success.. Demand..(units/ Profit..per Monthly
ondition Probabili month) ..Unit ..Payoff
..ty
New..Drug..Line Favorable 71% 4,341 $0.63 $2,734.83
New..Drug..Line Unfavorable 29% 1,205 $0.63 $759.15
Existing..Drug..Line Favorable 63% 5,475 $0.48 $2,628.00
Existing..Drug..Line Unfavorable 37% 1,807 $0.48 $867.36
No..Changes Favorable 81% 730 $0.84 $613.20
No..Changes Unfavorable 19% 241 $0.84 $202.44
