Exam 2 MSOM Example Problems

4.7 Hudson Corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows:   Demand Staffing Options High Medium Low Own staff 650 650 600 Outside vendor 900 600 300 Combination 800 650 500 If the demand probabilities are 0.2, 0.5, and 0.3, and the table below shows the total cost of the different options, construct a risk profile for the optimal decision in the table. Option Total Cost Own Staff 635 Outside Vendor 570 Combination 635

10.2 Note:- Please refrain from offering handwritten solutions. Please ensure that your response maintains accuracy and quality to avoid receiving a downvote. Take care of plagiarism. Answer completely. You will get up vote for sure.

7 Consider a supply chain with the manufacturer, the retailer and end-users, using a buy-back contract, as below cost-benefit & demand forecasting details: F=$120,000 ; c=$30 ; w=$75 ; b=$50 ; p=$122 ; s=$15; Demand 1,800 1,920 2,040 2,160 Probability 26% 27% 29% 18% Calculate the retailer’s marginal profit, retailer’s marginal loss, manufacturer’s marginal profit. Calculate the expected profit of the retailer and the manufacturer for 4 above-mentioned demand scenarios. Then, conclude on which production quantity Q to maximize manufacturer’s expected profit, which production quantity Q to maximize retailer’s expected profit.

ABC Company negotiates a 1% credit card discount.  If a customer charges $1,000 on his VISA credit card, how much money will ABC receive? ABC Company sold $10,000 of merchandise to a customer on September 1.  The terms were 2/10, n/30.  How much money will ABC Company is paid by September 8? Group of answer choices $9,000 $10,000 $9,800 $7,000

Please solve 15, 16, 17. Thank you!.  15. You have two types of buyers for your product. Forty percent of buyers value your product at $10 and the remainder of the buyers value it at $6. What price maximizes your expected revenue? Group of answer choices a. $7 b. $6 c. $8 d. $10     16.  Skip, the manager of a local senior living facility, has been under a lot of pressure from his regional manager because the occupancy rate at his facility is 80%. Given his fixed costs, if he wants his average per patient costs to equal his company’s average per patient cost (which is lower than Skip’s), he needs to increase his occupancy rate to 90%. When he does this, he will be taking advantage of   Group of answer choices a. Economies of scale b. Marginal analysis c. Opportunity costs d. Economies of scope   17.  When Sabrina reduced the price of her hourly accounting rates, her clients asked her to devote more hours to the financial aspects of their businesses. Her clients’…

4 The service quality-related e-demand factors show a weak connection with the provision of e-government information or services. Select one: a. True b. False

1 . Individual Problems 17-2 You're a contestant on a TV game show. In the final round of the game, if contestants answer a question correctly, they will increase their current winnings of $3 million to $4 million. If they are wrong, their prize is decreased to $2,250,000. You believe you have a 25% chance of answering the question correctly. Ignoring your current winnings, your expected payoff from playing the final round of the game show is   . Given that this is    , you    play the final round of the game. (Hint: Enter a negative sign if the expected payoff is negative.)   The lowest probability of a correct guess that would make the guessing in the final round profitable (in expected value) is    . (Hint: At what probability does playing the final round yield an expected value of zero?)

1) A key difficulty facing insurance companies is that people know more about their health than do insurance companies, and that those people who are seriously ill are the most likely to want to obtain health insurance. What is this phenomenon called? A) moral hazard B) economic irrationality C) asymmetric information D) adverse selection 2)  An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy. What is the term used to describe the situation above? A) moral hazard B) adverse selection C) asymmetric information D) economic irrationality 3) The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is A) inefficient market hypothesis. B) moral hazard. C) information disparity. D) asymmetric information. 4) Which of the following parties is…

1 The functional e-demand factors can be organized into three quality packages(USS): Use quality, System Quality, and Service quality. Select one: a. False b. True

(A) (B) Refer to the above graphs. Which graph depicts a situation where sellers are increasing their output because their product is becoming more popular among buyers? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Problem 12-05 (Algo) A risk-neutral consumer is deciding whether to purchase a homogeneous product from one of two firms One firm produces an unreliable product and the other a reliable product At the time of the sale, the consumer is unable to distinguish between the two firms’ products From the consumer’s perspective, there is an equal chance that a given firm’s product is reliable or unreliable The maximum amount this consumer will pay for an unreliable product is $0, while she will pay $210 for a reliable product a Given this uncertainty, what is the most this consumer will pay to purchase one unit of this product? $ b How much will this consumer be willing to pay for the product if the firm offering the reliable product includes a warranty that will protect the consumer? $ Problem 12-04 You are the manager of a firm that sells a “commodity” in a market that…

A group of 10 people have the following annual incomes: $55,000, $30,000, $15,000, $20,000, $35,000, $80,000, $40,000, $45,000, $30,000, $50,000. Complete the table.   Income Quintile Share of Income $15,000 Bottom   $20,000 $30,000 2nd   $30,000 $35,000 3rd   $40,000 $45,000 4th   $50,000 $55,000 Top   $80,000   If $4000 is taxed from the top earner and transferred to the lowest earner, would that increase or decrease the share of income held by the top quintile? Would this transfer increase or decrease the share of income held by the bottom quintile? Would this have any effect on the 2nd quintile? The 3rd? The 4th? Would this transfer increase, decrease, or have no effect on income inequality in this group? Redistributing income from the highest earner to the lowest one would reduce the utility of the top earner and increase the utility of the lowest earner. But what would happen to the overall utility of the…

It costs $1 million in R&D to develop a new diabetes treatment.  The marginal cost of producing and marketing a treatment, once discovered, is $10.  Suppose that Pfizer currently is selling a treatment that is covered by a valid patent, which is set to expire in one year.  What is the most likely outcome of a proposed law that would allow generic drug companies to enter any market 5 years before the expiration of the patent covering it? Question options:   a)  More diabetics would use the treatment Pfizer invented, and drug companies would invest more in R&D for future treatments   b)  Fewer diabetics would use the treatment Pfizer invented, and drug companies would invest more in R&D for future treatments   c)  More diabetics would use the treatment Pfizer invented, and drug companies would invest less in R&D for future treatments   d)  Fewer diabetics would use the treatment…

Endanger animals such a panda is non-use value. Explain why non-use, or passive use values, cannot be valued either by observing their prices in markets or with revealed preference techniques. Finally, explain how stated preference techniques can be used to estimate non-use value. (250 words or fewer.)  (In environmental view)

6 Explain the principle of Indemnification in case of marine insurance contract with suitable example. sub:insurence

1) The standards for a product call for 2.5 pounds of a raw material that costs $6.10 per pound. Last month, 30,000 pounds of the raw material were purchased for $187,500. The actual output of the month was 9,000 units of the product. A total of 22,200 pounds of the raw material were used to produce this output. Required: a. What is the materials price variance for the month? b. What is the materials quantity variance for the month?

No written by hand solution Version:0.9 StartHTML:0000000105 EndHTML:0000006359 StartFragment:0000000141 EndFragment:0000006319   The demand and the supply of timber for construction in Australia are given by   QD =100 – 20P   QS = 5P   We assume the market is perfectly competitive.   2.1. Compute the equilibrium price PCE and quantity QCE.    2.2. Plot on a graph: the demand curve, the supply curve, and the equilibrium price and quantity.    2.3: Calculate the price elasticity of demand and price elasticity of supply at the equilibrium price and quantity.    2.4. Calculate the producer surplus and consumer surplus in the equilibrium and illustrate them in a graph.    2.5. Suppose there are many construction companies collapsed (and left the market), use a demand and supply graph to explain how the collapse affects the equilibrium price and quantity.    2.6. Consider the setup in 2.1-2.4, and suppose there is a strike of loggers, which change the supply to QS = 4P. Calculate the new…

2.      Due to pandemic since 2020, many business establishment shutdowns because of insufficient fund that will supposedly sustain its daily operation. What could be the possible risk aroused and their response to the current situation?

A4 A known phenomenon in everyday life is that often in a purchase situation there is a deviation between the original asking price from the seller (in form of “manufacturer’s suggested retail price” (MSRP), list price etc.) and the transaction price you as a consumer actually pay in the end. This deviation is due to different forms of tactical discounting practices according to Smith. The seller company usually put in a lot of efforts to managing these price variances. But could you theoretically explain this deviation in a purchase situation out of the consumer’s perspective. This on how it impacts the behavior and decision making of the consumer? Use concepts e.g., like customer utility, willingness-to-pay, consumer surplus, and reference price in your explication. Also, out of your above answer and your now extensive knowledge in pricing theory – what could be major flaws in the proposing argument that it would be better for everybody (society, citizens, consumers, companies etc.)…

A plaintiff believes that there is a 30% chance that he will winIf he wins, he will gain $50,000. It costs him $5000 in non‐recoverable litigation costs to take the case to court. If the plaintiff is risk‐neutral, which of the following is true? A) The plaintiff will take the case to court with an expected net‐gain of $10,000 B) The plaintiff will take the case to court with an expected net‐gain of $15,000 C) The plaintiff will not take the case to court because he is afraid of losing. D) None of the above

Market: Motorcycles. Scenario: Consumers learn that cars will be much more heavily taxed starting with next year’s models.

Over the course of a customer’s lifetime of reading a weekly magazine priced at $4 per issue, what is the value of the magazine? Assume a customer acquisition cost of $12, a retention cost of $0, printing and distribution costs of $1, an annual retention rate of 77% and an annual discount rate of 2.6%. Assume that price and non-marketing variable costs remain constant over the customer’s lifetime of reading the magazine.   Options:   A) 10.05   B) 30.50   C) 73.49   D) 14.20   E) 0.02   F) 261.25