Question

a) Mercy Oppong, a level 300 Lower student at Wisconsin International University College, is thinking of the course she should graduate in. She is considering Marketing, Human Resource Management and Finance. She may earn a first class, second class or third class if she chooses anyone of these courses. Her annual salaries if she gets a job after the first degree and if she pursues further studies, are shown in Table 1.
      Table 1: Mercy Oppong’s annual salaries for first degree and after further studies

Graduation Prospects
Course   
Third Class
Second Class
First Class
Marketing
GHC 500
GHC1,500
Do nothing: GHC1,800
Pursue Masters: GHC2,300
HR
400
1,200
Do nothing : GHC2,400
Pursue Masters: GHC3,000 (at a cost of GHC700)
Finance
500
Do nothing:GHC1,500
Pursue Masters: GHC2,000 (at a cost of GHC400)
Do nothing: GHC1,500
Pursue Masters: GHC2,000 (at a cost of GHC400)
Pursue professional program: GHC2,800 (at a cost of GHC700)

NB: Miss Oppong has a 60% chance of getting a first class and a 30% chance of getting a second class.   
Required:

Draw a decision tree to represent the decision situation of Miss Oppong.

                                                                                                            
(ii) Evaluate each of the three alternatives

Advise Miss Oppong on the best course to select. (1 mark)

(b) Under the concept of just-in-time, waste is considered as any activity which does not add value to an operation.
     (i) Describe two (2) types of waste and explain how they can be eliminated or reduced

Answer 1

The decision tree is as follows:

The Calculation of decision tree is as follows:

Calculate the expected value of the each decision and events by moving from backward to forward.

Expected value of event = probability of event x payoff of the event

Expected value at event node = sum of expected value of events node

Expected value of the decision node = maximum among the expected value of decision branches

The EMV of Marketing decision is highest i.e 1880. Thus Miss Oppong should select Marketing specialization and if the First class is achieved Miss Oppong should pursue Masters to earn more earning.