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Build big now, or build in phases?

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Three futures for cold storage demand in Dammam (illustrative)
Three futures for cold storage demand in Dammam (illustrative)
ScenarioChance (percent)Pallets stored (thousands)Price per pallet a year (SAR)What would cause it
Upside25851,000Food imports and online grocery grow fast
Base5070900Growth carries on at today's pace
Downside2545800A rival opens nearby and prices fall

The prompt

A logistics company plans a cold store in Dammam, Saudi Arabia, using the three scenarios in the table above. Option Big: 100 thousand pallet places, fixed costs of SAR 45 million a year. Option Phased: 60 thousand places now, fixed costs of SAR 28 million a year, with land and permits ready to add 40 thousand more later. Each stored pallet adds SAR 200 a year of variable cost. Compare yearly operating profit in each scenario. (Fictional company, illustrative figures.)

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