From the end of Chapter 6, consider the two capacity options for Arktec manufacturing from Problem 2 and the three possible demand scenarios from Problem 4. First, draw the decision tree for Arktec Manufacturing. When drawing your tree, assume that managers must select a capacity option before they know what the demand level will actually be. Then, calculate the expected value for each decision branch. Which option would you prefer and why?
Bozarth, C. C., & Handfield, R. B. (2016). Introduction to operations and supply chain management (4th ed.). Upper Saddle River, NJ: Pearson.
Chapter 3: Process choice and layout decisions in manufacturing and services
Chapter 6: Managing capacity
Chapter 14: Managing projects
Chapter 15: Developing products and services