In Discussion Forum 4, identify the forum in the subject line of your posting (e.g., “Discussion Forum 4/[Your Name]”). Post your response to the discussion topic(s) by the date indicated in the Course Calendar, and comment on at least two classmates’ responses.
Adriana owns My Best Friend, a pet grooming boutique. A high-end developer purchased a large tract of land nearby and is constructing luxury condominium townhomes. According to city records, once the project is completed there will be approximately 180 new families in her immediate service area. Adriana is considering hiring a part-time groomer at an additional cost of $15,000 per year in wages.
She estimates a possible increase of $25,000 in net revenue as a result of increased business brought about by this change to the neighborhood. However, there is also a chance of decreased demand for services, should the bylaws of the owners’ association prohibit pets, particularly coupled with existing competition from grooming services offered by large retail chain stores such as PetSmart.
She projects a possible loss of $11,000 off last year’s net revenue. Data show that 75% of regional associations allow pets; whereby, the other 25% are pet-free communities. Adriana believes that if she does not hire a part-time worker, her business would generate the same revenue as the prior year.
Do you think Adriana should hire a groomer? Support your objective advice using quantitative data analysis by applying probability theory relative to the estimated value of hiring the new groomer. Your explanation should include
(1) a decision tree diagram (using Excel) to assist in evaluating Adriana’s dilemma; and (2) a recommendation of a course of action, which explicitly explains why Adriana should take your counsel. Identify uncertainty and risk, and use the decision tree diagram and any numerical data to back up your position. [MO3.1, MO3.2]
Your initial posting should be 200 to 300 words. Before posting, revise your composition to ensure that it is written in the objective third person and is free of grammar and structure errors.
As this activity is a dialog exercise, engage peers by responding in a way that professionally supports or challenges the discourse. Once the due date of the forum is passed, your contributions are still welcome; however, they will not be considered by your mentor in determining your forum grade.