Purchase Solution

Decision Tree Analysis: Emergency Power Generator

Not what you're looking for?

Ask Custom Question

Q-7a. The management of a bank in the Caribbean was concerned about the potential loss that might occur in the event of a hurricane. The bank estimated that the loss from one of these storms could be as much as $100 million including losses due to interrupted service and customer relations. One project the bank is considering is the installation of an emergency power generator at its operations headquarters. The cost of the emergency generator is $800,000, and if it is installed no losses from this type of storm will be incurred. However, if the generator is not installed, there is a 10% chance that a power outage will occur during the next year. If there is an outage there is a 5% probability that the resulting losses will be very large or approximately $80 million in lost earnings. Alternatively, it is estimated that there is a 95% probability of only slight losses of around $1 million. Using decision tree analysis, determined whether the bank should install the new power generator.

Purchase this Solution
Solution Summary

The solution provides step by step method for a decision tree analysis for the installation of an emergency power generator.

Purchase this Solution
Free BrainMass Quizzes
Terms and Definitions for Statistics

This quiz covers basic terms and definitions of statistics.

Measures of Central Tendency

Tests knowledge of the three main measures of central tendency, including some simple calculation questions.

Measures of Central Tendency

This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.

Know Your Statistical Concepts

Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.

View More Free Quizzes
Related BrainMass Solutions

  • Decision Tree Analysis for Caribbean bank, power generator

    See the attached decision tree drawing. The expert examines a decision tree analysis for Caribbean bank to decide whether to install a power generator or not.

  • Place-Plus

    Using decision tree analysis, determine whether the bank should install the new power generator. Please see the attached file.

  • Graphs, Variables, Confidence Intervals, Population Mean Value, Highest EMV

    Using decision tree analysis, determined whether the bank should install the new power generator. An investor is to purchase one of three types of real estate.

  • QMB Practice Questions & Answers

    Using decision tree analysis, determined whether the bank should install the new power generator. An investor is to purchase one of three types of real estate.

  • Hospitality Management Crisis Plan

    If however, generator power is disconnected, then there are batteries build into the guests room that enable the locks to function as well as remain connected to the alarm system.

  • Computer Science: Interpreter, Complier, and Operators

    We can write the syntax as If(non emergency) {envoke_normal(); } 11. We can represent the knowledge using pruning decision tree.

  • Information Systems

    364543 decision support system differs from a DSS generator How does a specific decision support system (DSS) differ from a DSS generator? The response addresses the queries posted in 397 words with references.

  • Decision Analysis

    140550 Decision Analysis Delta Electronic Services is an electrical-utility company serving parts of several states.

  • Decision tree

    Perform a sensitivity analysis to evaluate the consequences of these uncertainties to the decision. c. Develop a decision tree to assist the company with this decision. 1.

View More Related Solutions