WGU C207 Task 2 Decision Tree Analysis | Latest Update
with Complete Solution.
Decision Tree Analysis
C207 Task 2
David J. Hairston
Western Governors University
A. Describe..a..business..question..that..could..be..answered..by..applying..decision..tre
e..analysis..and..is..derived..from..the..scenario..in..the..attached..“Decision..Tree..Anal
ysis..Resources."
What..is..the..better..business..decision..based..on..probabilities..using..decision..analysis,..in
cluding..Payoffs..and..EVs..for..three..alternatives?..Based..on..the..data..of..a..new,..competi
ng..drug..release,..MPC..must..remain..competitive..in..the..market...To..stay..competitive,..s
hould..MPC..create..an..additional..new..drug,..exploit..the..current..drug..it..already..has..on..t
he..market,..or..make..no..changes..to..its..current..drug..and..process?
B. Identify..the..relevant..data..values..required..for..your..decision..tree..analysis,..includi
ng..the..following:
• probabilities
• payoffs
• profits
• demand
When..identifying..the..relevant..data..values,..first..would..be..the..Probabilities..included..in..t
he..favorable..market..69%,..next..would..be..with..exploited..current..drug..61%..and..finally,..
you..have..no..changes..77%...The..unfavorable..market..probabilities..are..31%..for..the..ne
w..drug,..39%..for..the..exploited..current..drug,..and..23%..for..no..changes.
When..identifying..the..relevant..data..values..in..Payoffs.. . They..are..calculated..by..the..de
, mand..for..units..and..the..percentage..rate..per..market...The..payoff..for..creating..a..new..dru
g..is..$2,686.45..for..the..favorable..market,..and..for..the..unfavorable..market,..it..is..$880.75...
Next,..for..exploiting..the..current..drug,..the..payoff..is..$4,294.29..in..the..favorable..market..a
nd
$1471.47..in..the..unfavorable..market...Making..no..changes..for..MPC,..the..payoffs..are
$571.59..in..the..favorable..market..and..$224.46..in..the..unfavorable..market.
When..identifying..the..relevant..data..values..in..Profits,..the..first..is..$2,116.68..in..the..new..d
rug,..next..is..$3,193.38..in..the..exploited..current..drug,..and..$491.74..with..no..changes.
When..identifying..the..relevant..data..values..in..the..Demand,..the..new..drug..has..4133..un
its..in..the..favorable..market..and..1355..units..in..the..unfavorable..market...The..exploited..c
urrent..drug..has..5577..units..in..the..favorable..market..and..1911..units..in..the..unfavorable
..market...Finally,..regarding..the..demand..for..no..change,..you..have..657..units..in..the..fav
orable..market..and..258..units..in..the..unfavorable..market.
C. Report..how..you..analyzed..the..data..using..decision..tree..analysis..by..doing..t
he..following:
1. Complete..a..decision..tree..diagram,..including..each..of..the..following:
• state-of-nature..nodes
• calculated..payoffs,..each..expressed..out..to..two..decimal..places
• expected..values,..each..expressed..out..to..two..decimal..places
Note:..You..can..submit..the..completed..decision..tree..diagram..using..a..separa
te..attachment..or..the..optional..template..on..the..attached..“Decision..Tree..Ana
lysis..Resources.”
Note:..Refer..to..“Prepare..for..the..Performance..Assessment..Task..2”..in..the..course..
of..study..to..see..examples..of..acceptable..output.
with Complete Solution.
Decision Tree Analysis
C207 Task 2
David J. Hairston
Western Governors University
A. Describe..a..business..question..that..could..be..answered..by..applying..decision..tre
e..analysis..and..is..derived..from..the..scenario..in..the..attached..“Decision..Tree..Anal
ysis..Resources."
What..is..the..better..business..decision..based..on..probabilities..using..decision..analysis,..in
cluding..Payoffs..and..EVs..for..three..alternatives?..Based..on..the..data..of..a..new,..competi
ng..drug..release,..MPC..must..remain..competitive..in..the..market...To..stay..competitive,..s
hould..MPC..create..an..additional..new..drug,..exploit..the..current..drug..it..already..has..on..t
he..market,..or..make..no..changes..to..its..current..drug..and..process?
B. Identify..the..relevant..data..values..required..for..your..decision..tree..analysis,..includi
ng..the..following:
• probabilities
• payoffs
• profits
• demand
When..identifying..the..relevant..data..values,..first..would..be..the..Probabilities..included..in..t
he..favorable..market..69%,..next..would..be..with..exploited..current..drug..61%..and..finally,..
you..have..no..changes..77%...The..unfavorable..market..probabilities..are..31%..for..the..ne
w..drug,..39%..for..the..exploited..current..drug,..and..23%..for..no..changes.
When..identifying..the..relevant..data..values..in..Payoffs.. . They..are..calculated..by..the..de
, mand..for..units..and..the..percentage..rate..per..market...The..payoff..for..creating..a..new..dru
g..is..$2,686.45..for..the..favorable..market,..and..for..the..unfavorable..market,..it..is..$880.75...
Next,..for..exploiting..the..current..drug,..the..payoff..is..$4,294.29..in..the..favorable..market..a
nd
$1471.47..in..the..unfavorable..market...Making..no..changes..for..MPC,..the..payoffs..are
$571.59..in..the..favorable..market..and..$224.46..in..the..unfavorable..market.
When..identifying..the..relevant..data..values..in..Profits,..the..first..is..$2,116.68..in..the..new..d
rug,..next..is..$3,193.38..in..the..exploited..current..drug,..and..$491.74..with..no..changes.
When..identifying..the..relevant..data..values..in..the..Demand,..the..new..drug..has..4133..un
its..in..the..favorable..market..and..1355..units..in..the..unfavorable..market...The..exploited..c
urrent..drug..has..5577..units..in..the..favorable..market..and..1911..units..in..the..unfavorable
..market...Finally,..regarding..the..demand..for..no..change,..you..have..657..units..in..the..fav
orable..market..and..258..units..in..the..unfavorable..market.
C. Report..how..you..analyzed..the..data..using..decision..tree..analysis..by..doing..t
he..following:
1. Complete..a..decision..tree..diagram,..including..each..of..the..following:
• state-of-nature..nodes
• calculated..payoffs,..each..expressed..out..to..two..decimal..places
• expected..values,..each..expressed..out..to..two..decimal..places
Note:..You..can..submit..the..completed..decision..tree..diagram..using..a..separa
te..attachment..or..the..optional..template..on..the..attached..“Decision..Tree..Ana
lysis..Resources.”
Note:..Refer..to..“Prepare..for..the..Performance..Assessment..Task..2”..in..the..course..
of..study..to..see..examples..of..acceptable..output.
