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Dawson Electronics is a manufacturer of high-tech control modules for lawn sprinkler systems.
4. Dawson Electronics is a manufacturer of high-tech control modules for lawn sprinkler systems. Denise, the CEO, is trying to decide if the company should develop one of the two potential new products, the Water Saver 1000 or the Greener Grass 5000. With each product, Dawson can capture a bigger market share if it chooses to expand capacity by buying additional machines. Given different demand scenarios, their probabilities of occurencse, and capacity expansion versus no change in capacity, the potential sales of each product are summarized in the table:With Capacity Expansion:Probability of Occurence.25.50.25Without Capacity Expansion:Probability of Occurence.25.50.25A.
