As a General Manager for Global Operations, your goal is to expand US operations

Question

As a General Manager for Global Operations, your goal is to expand US operations internationally.

Three potential markets that you observe are:

Select one:

a. Enter market of Country A to maximize Expected Profit

b. None of the three country markets will give a positive expected profit

c. Enter market of Country C to maximize Expected Profit

d. Enter market of Country B to maximize Expected Profit

Prospect:s Medium Low Market High CountryA Prob Sale Country BHigh Prob Sale Country CHigh Prob Sale 0.5 1,000,000 500,000100,000 Medium Low 1,000,000 300,000100,000 Medium Low 1,000,000 400,000100,000

Explanation / Answer

Country A expected value = .2*1000,000 + .3*500,000 + .5*100,000 = 400,000

Country B = .3*1000,000 + .5*300,000 + .2*100,000 = 470,000

Country C = .2*1000,000 + .3*400,000 + .5*100,000= 370,000

d. Enter market of Country B to maximize Expected Profit. Correct option.

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