Business, 17.08.2019 20:10 kimjooin02

Adistributor of computer parts purchases a specific component from a supplier in lots of 1000 units. the cost of purchasing a lot is $30,000. the supplier is known to supply imperfect lots. in other words, a lot received by the distributor may contain defective units. historical data suggest that the proportion of defective units in a lot supplied by this supplier follows the following probability distribution: proportion of defectiveunits in a lotprobability0.050.500.100.250.250 .150.500.10the distributor inspects the entire lot for defective units before selling the units to pc repair shops at a price of $45 per unit. the inspection process is error-proof so all defective units in a lot are detected and replaced by the distributor. it costs $20 for the distributor to replace a defective unit. the distributor has recently learned that the supplier offers a guarantee policy through which the supplier will assume the cost of replacing defective units in excess of the first 100 faulty units found in a given lot at no cost. [this means that the first 100 defective units found in a lot are replaced by the distributor for $20 per unit; however, all additional defective unit (if any) found in a lot are replaced by the supplier at no cost to the distributor.] this guarantee policy may be purchased by the distributor prior to the receipt of a given lot at a cost of $1000 per lot. the distributor wants to determine whether it is worthwhile to purchase the supplier’s guarantee policy. input data number of units in a lot 1000cost of purchasing a lot $30,000cost of repairing a defective unit in a lot $20cost of purchasing supplier's guarantee policy (per lot) $1,000selling price for a unit of the component $45task: create a complete decision tree by using precisiontree®.

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Adistributor of computer parts purchases a specific component from a supplier in lots of 1000 units....

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