Management Question

MedTech Solutions is considering expanding their manufacturing capabilities to support a new AI-powered diagnostic device. The leadership team must decide whether to build a new production facility, upgrade the existing facility, or outsource production. Each option carries different costs, probabilities of market demand scenarios, and potential payoffs.

Option 1: Build New Facility

• Cost: $1.2 million
• Strong Demand (60%): Gain $2.5 million
• Weak Demand (40%): Gain $1.0 million

Option 2: Upgrade Existing Facility

• Cost: $600,000
• Strong Demand (50%): Gain $1.6 million
• Weak Demand (50%): Gain $900,000

Option 3: Outsource Production

• Cost: $300,000
• Strong Demand (40%): Gain $1.2 million
• Weak Demand (60%): Gain $500,000

Part 1: Excel Decision Tree Model

Build a decision tree in Excel that includes:

1. All three options
2. Chance nodes (with demand probabilities)
3. Associated payoffs (subtracting the cost from revenue)
4. Expected Monetary Value (EMV) for each branch

Highlight your final recommendation based on the EMV calculation.

Part 2: Sensitivity Analysis

Perform a sensitivity analysis by:

1. Adjusting the probability of strong demand by 10% for each decision path
2. Adjusting the strong demand payoff by 20% for at least one option
3. Recalculating EMVs and determining if the optimal decision changes

In Excel, clearly show the impact of these changes in a side-by-side comparison.

Part 3: Video Presentation (1015 Minutes)

Create a narrated video walkthrough in which you:

Explain your decision tree step-by-step:

1. Why each node, branch, and payoff was set up the way it was
2. How you calculated EMV

Demonstrate your sensitivity analysis:

1. Show how the EMVs and decisions change when inputs are modified
2. Explain which factors had the biggest impact on the final decision

Discuss stakeholder engagement:

1. Explain how your analysis and modeling can be used to build stakeholder confidence
2. Share strategies for communicating your recommendation persuasively and transparently
3. Use visuals (Excel spreadsheet, PowerPoint if needed), and speak clearly as though presenting to executives or a project team.

Written Summary (400600 Words)

Along with your Excel file and video, submit a brief summary that includes:

• Final decision and rationale
• Key takeaways from the sensitivity analysis
• Stakeholder communication strategy

Submission Checklist:

Excel file with decision tree and sensitivity analysis

1015 minute video presentation

Written summary ( Word)

Useful Videos for Project:

Requirements:

• There is no minimum or maximum required number of pages. Your analysis will be considered complete, if it addresses all the components outlined above.
• Use of proper APA formatting and citations. If supporting evidence from outside resources is used those must be properly cited. A minimum of 4 sources (excluding the course textbook) from scholarly articles or business periodicals is required.
• Include your best critical thinking and analysis to arrive at your justification.

Struggling with your essay and deadlines?

Get this or a similar paper done in as fast as 4 hours, 24/7.

NB: We do not sell prewritten papers. All essays are written from scratch according to specific needs and instructions

✔Secure Service ✔ Plagiarism Free ✔On-time Delivery

WRITE MY PAPER