Tech 4010 - Assignment 3-2

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Memorial University of Newfoundland *

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4010

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Computer Science

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Dec 6, 2023

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pdf

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Tech 4010 - Assess Implementation of Technology Memorial University of Newfoundland Assignment 3: Analysis November 27th, 2023 Table of Contents
Question 1: 3 Answer 1: 3 Question 2: 4 Answer 2: 4 Figure 1: Software Decision Tree 6 Question 3: 6 Answer 3: 7 Question 4: 8 Answer 4: 9 Figure 2. Smartphone Relevance Tree 9 Question 5: 10 Answer 5: 10 Panel of Experts: 10 Survey Questions: 11 Question 6: 12 Answer 6: 12 Strengths: 12 Weaknesses: 12 Opportunities: 13 Threats: 13 Recommendation: 14 Question 1: 2
John Doe has to choose how many sandwiches to make in advance of each day before he knows the actual demand. If left overnight, the sandwiches will be off and be unable to be sold. His choice is between 40, 50, 60 and 70 sandwiches. The actual demand can also vary between 40, 50, 60 and 70 with the probabilities as shown in the table - e.g. P(demand = 40) is 0.2. The table then shows the profit or loss, for example, if he chooses to make 70 but demand is only 50, then he will make a loss of $75.00. Daily Demand Probability Daily Supply 40 50 60 70 40 0.2 $100.00 $0.00 $(100.00) $(200.00) 50 0.2 $100.00 $125.00 $25.00 $(75.00) 60 0.3 $100.00 $125.00 $150.00 $(25.000) 70 0.3 $100.00 $125.00 $150.00 $175.00 Using the minimax, maximax, minimax regret theorem, determine the optimal number of sandwiches John Doe should produce per day. Answer 1: Minimax: 40 sandwiches will guarantee no loss in profit. You will always be gaining $100 no matter the demand. Maximax: 70 sandwiches has the highest upside, with a potential profit of $175, but there is also a risk of losing $200 if the demand is low. Minimax Regret Theorem: 40 sandwiches will result in the least regret. Even if the demand is at its lowest, it still will have a profit of $100 and no regret. Optimal #: Based on the above results, the optimal number of sandwiches is 40. 3
Question 2: You are a technology manager of a firm that offers retail items in an on-line environment. The software that your firm currently utilizes does not fully meet the requirements of your clients and you have three options, as outlined below, to correct the issues. Using a decision tree, determine the best option for the firm (Show All Calculations) . Process Cost Market Reaction Probability of Success Return-On-Inv estment Purchase New Software $3,000,000 Good 90% $4,000,000 Poor 10% $50,000 Create Software (In-House) $1,500,000 Good 75% $3,000,000 Poor 25% $250,000 Update Current Software $500,000 Good 60% $2,000,000 Poor 40% $250,000 Answer 2: Expected Value (EV) Calculation (Purchase Software) EV ($) 0.9 x 4,000,000 3,600,000 0.1 x 50,000 5,000 EV Total 3,605,000 EV Calculation (Create Software) EV ($) 0.75 x 3,000,000 2,250,000 0.25 x 250,000 62,500 4
EV Total 2,312,500 EV Calculation (Update Software) EV ($) 0.6 x 2,000,000 1,200,000 0.4 x 250,000 100,000 EV Total 1,300,000 Software Calculation Purchase New Software EV - Cost = $3,605,000 - $3,000,000 = $605,000 Create Software EV - Cost = $1,500,000 - $2,312,500 = $812,500 Update Software EV - Cost = $1,300,000 - $500,000 = $800,000 5
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