Assignment:
Discuss the below:
1) Todays electronics specializes in manufacturing modern electronic components. It also builds the equipment that produces the components. Phyllis Weinberger, who is responsible for advising the president of Today's Electronics on electronics manufacturing equipment, has developed the following table concerning a proposed facility.
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|
Profit
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strong market
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fair market
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poor market
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|
large facility
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550,000
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110,000
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-310,000
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|
medium facility
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300,000
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129,000
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-100,000
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|
small facility
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200,000
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100,000
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-32,000
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no facility
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0
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0
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0
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a) develop an opportunity loss table
b) What is the minimum regret decision
Q2) A group of physicians have been approach by the market research firm that offers to perform a study of the market at a fee of $5,000. The market researchers claim that their experience enebles them to use Baye's theorem to make the following statements of probability:
• Probability of a favorable market given a favorable study= 0.82
• Probability of an unfavorable market given a favorable study= 0.18
• Probability of a favorable market given an unfavorable study= 0.11
• Probability of an unfavorable market given an unfavorable study= 0.89
• Probability of a favorable research study = 0.55
• Probability of an unfavorable research study = 0.45
a) Develop a new decision tree for the medical professionals to reflect the options now open with the market study
b) Use the EMV approach to recommend a strategy
c) What is the expected value of sample information? How much might the physicians be willing to pay for a market study?
Q3) Use exponential smoothing with a smoothing a smoothing constant of 0.3 to forecast the demand for fertilizer
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year
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demand for fertilizer (1,000s of bags)
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1
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4
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2
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6
|
|
3
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4
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Assume that last period's forecast for year 1 is 5,000 bags to begin the procedure. Would you prefer to use the smoothing model or the weighted average model? Explain why?
Q4) Management of Davis Departament store has use time-series extrapolation to forecast retail sales for the next four quarters. The sales estimates are $100,000, $120,000, $140,000 and $160,000 for respective quarters before adjusting for seasonality. Seasonal indices for the four quarters have been found to be 1.30, 0.90, 0.70 and 1.10 respectively. Compute a seasonalized or adjusted sales forecast.
Q5 Farris Billiard supply sells all types of billiard's equipment, and is considering manufacturing their own brand of pool cues. Misty Farris, the production manager is currently investing the production of a standard house pool cue that should be very popular. Upon analyzing the cost, Misty determines that the materials and labor costs for each cue is 25 dollars, and the fixed cost that must be covered is 2400 dollars per week. With a selling price of 40 dollars each, how many pool cues must be sold to break even? What would the total revenue be at this break even point? Misty Farris believes that there is a high probability that 120 pool cues can be sold if the selling price is appropriately set. What selling price would cause the break even point to be a 120?