Wgu Jgt2 Decision Analysis Task 4

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Shuzworld: Operations Analysis JGT2 Decision Analysis, Task 4 Introduction: Shuzworld is a national retailer based in Omaha, Nebraska that focuses on selling shoes, boots, and sandals. In addition, the company produces its own line of products that include work boots, sandals, rubber boots, and rainwear; along with sport and adventure footwear (MindEdge, 2014). The purpose of this report is to provide recommendations based on several analyses involving the company’s retail store planning, trade-offs in minimizing production costs, reordering practices, and competitive advantage. A. Store Recommendation: Shuzworld is looking to open a retail store in one of its prime markets – Auburn. The company has identified three possible options: 1) open a stand-alone store just outside of Auburn, 2) open a store in the Auburn Mall, and 3) do not open a store at this time. The grid below shows the potential profit and loss of each option (MindEdge, 2014): | Potential Profit/Loss | | Stand-Alone Store | Auburn Mall Store | No Store | Favorable Market | $ 700,000 | $ 300,000 | $ 0 | Unfavorable Market | $ (400,000) | $ (50,000) | $ 0 | To assess whether the market is favorable or not, the company is open to investing $20,000 in a research survey. If a survey is performed, it is estimated that the results are 60% likely to be positive and 40% likely to be negative. The survey proposal suggests that the favorable market probability will increase to 70% with positive survey results and the unfavorable market probability will increase to 80% with negative survey results (MindEdge, 2014). In order to determine which of the three options make sense for Shuzworld in Auburn, the company needs to use the decision tree analysis tool. The decision tree analysis tool uses a graph (a decision tree)

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