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Type 4 Decision tree

Type 2 Organizational structure

Let’s consider “Itransition”, global software development company with more than 12 years of professional experience. This company deliver a full spectrum of software consulting and development services to clients from more than 30 countries across the globe. Business analysts, developers, and testers each report to a functional department manager and to a project manager simultaneously.

Which organizational structure is more suitable for this company? Give a principle scheme of such organizational structure. Explain why.

Answer An example of a matrix structure at a software development company. Describe…

Type 3 Leadership style

Mustafa Kemal Ataturk, the founder of the Turkish Republic and its first president, is known as a charismatic leader. He is widely admired and respected in Turkey and around the world. His picture appears in all schools, state buildings, all denominations of Turkish lira, and in many people’s homes in Turkey.

Even if charisma can be learned, a more fundamental question remains: Is it really needed? What is charisma? What are the advantages and disadvantages of charismatic leadership? Should organizations look for charismatic leaders when selecting managers?



Type 4 Decision tree

The owner of the Snow Fun Ski Resort wants to decide how the resort should be run in

the coming winter season. The resort’s profits for this year’s skiing season will depend

on the amount of snowfall during the winter. On the basis of prior experience, the

probability distribution of snowfall and the resulting profit is summarized below.


The owner has recently received an offer from a larger hotel chain to operate the resort for the winter, guaranteeing a $45,000 profit for the season. The owner is also considering leasing snowmaking equipment for the season. If the equipment is leased, the resort will be able to operate full time, regardless of the amount of natural snowfall.

If the owner decides to use snowmakers to supplement the natural snowfall, the profit for

the season will be $120,000 minus the cost of leasing and operating the snowmaking

equipment. The leasing cost will be about $12,000 per season, regardless of how much it

is used. The operating cost will be $10,000 if the natural snowfall is more than 40 inches,

$50,000 if it is between 20 and 40 inches, and $90,000 if it is less than 20 inches.

Draw the owner’s decision tree, calculate the expected profit of each variant and make a decision provided below.



Explanation of how this tree was drawn is

provided on the next page

The three branches emanating from the decision node (the rectangle located on the far

left side of the tree) represent the three possible ways to operate the resort this winter:

hiring the larger hotel chain, owner operating it without leasing snowmaking equipment,

and the owner operating it with the snowmaking equipment. Each of the last two

branches terminates in a chance node (circles) representing the amount of snow that will

fall during the season. Each chance node has three branches emanating from it, one for

each possible value of snowfall (the probability of that much snow is also indicated).

Time flows from left to right in the tree. Nodes at the left represent actions or chance

events that occur before nodes that are farther to the right.

The expected profit of letting the larger hotel operate the resort is $45,000– this is shown

in blue in the decision tree diagram.

The expected profits from the owner operating the resort with and without snowmaking

equipment are also shown in blue. Before explaining their calculations, first, let’s see

how profits for the remaining branches on the right end of the tree have been determined.

In the case where the owner operates the resort without snowmaking equipment, the

profits are dictated by the amount of snowfall. These profits ($120,000, $40,000, and

($40,000)) are as shown in the table on page 1.

Thus, the expected profit when the owner operates the resort without leasing the

snowmaking equipment is $40,000[$120,000*.4+$40,000*.2+(-$40,000)*.4].

When the owner operates the resort with snowmaking equipment and the snow fall

exceeds 40 inches in the winter, the profit is $98,000 [$120,000 minus leasing ($12,000)

and operating cost ($10,000)]. When the snow fall is between 20-40 inches, profit is

$58,000 [$120,000 – ($12,000 + $50,000)]. Finally, when the snow fall is less than 20

inches, profit is $18,000 [$120,000-($12,000 + $90,000)].

Thus, the expected profit when the owner operates resort with snowmaking equipment is


It appears that the owner’s best option (profit maximizing option) would be to operate the

resort with snowmaking equipment.


Date: 2016-03-03; view: 2609

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