DECISION SUPPORT MODEL Instructor: DR.DO BA KHANG CASE REPORT Harimann International REPORT CONTENT: CASE ABSTRACT 2 1/ Prepare a decision tree for the initial problem 2 2/ Do you agree with Mr. Dhawan’s analysis in Exhibit 3? 4 3/ Prepare a decision tree to include the different possible delivery dates of the embroider. Interpret the results. 5 4/ Prepare a decision tree to describe the situation with parallel production process 7 5/ Assuming that Mr. Dhawan can hire an assistant who would make sure that there will be no internal production problem. How much he would pay for this assistant at most? 8 6/ Do you have any other suggestion to help Dhawan to improve further his situation with the order? 10 …show more content…
Based on this part of the conversation, Dhawan believed that he was four times as likely to receive the goods on March 20 as on March 10.”So, we know the probability of every event note as below: * March 10: 1/8= 0,125 * March 20: 4 x 0,125=0.5 * And March 27: 1-0,125-0.5 =0,375 * With the event “March 10” – according to the schedule Dhawan expects, we face situation like question 1, no delay or delay. To avoid repeating, we use the result of question 1, Dhawan will receive profit 207,084 INR if it is delivered on March 10. * With the event “March 20” – Dhawan will miss the original schedule. However, he still receive profit with 3 events analysed in Question 1: pay 50%, pay 30% and pay 20%. We will use the result of question 1 in the event “delay” – He will lose 225,528 INR . * With the event “March 27” – it is the same with the event “March 20”. He will also lose 225,528 INR because of the late delivery. If Dhawan accepts the order, he will lose 171,451 INR whereas he just loses 18,840 INR for investing materials if he declines the order. 4/ Prepare a decision tree to describe the situation with parallel production process. Based on what we have analyzed in question 3, we should approach this
The fixed cost is assumed that Larry has discovered the other fixed cost incurred. The total investment is $800,000. The worst case scenario assumes that Larry got a total line of credit from the bank in the amount of $400,000 and invested $400,000 from other source. The Notes payable – short term and the long-term debt is (11.8 + 3.7) = 15.5 % from Table F in the handout. The Loan interest and payment per year is ($400,000 * 0.155)= $62,000. The Income data from Table F indicates that there is a 0.4% of all other expenses net out of the total sales which equals to $109,908 (5,700,666 gallons * $4.82 *0.4%) .
The third scenario was ignoring the option to invest in the second-generation project and selling the equipment in year 2. We evaluated this option as a put option. First, we calculated the probabilities for going up and down based on the assumption of a risk neutral word. As a result, the probability of going upward is calculated as 0.3375 and downward probability is 0.6625. In order to determine the present value of all the sequence cash flow at the end of year 2, we calculated the upside change rate and downside change rate as 64.87% and -39.35%, respectfully. The next step is to analyze the option value by using the “Binomial Tree” method. In order to determine the present value of all the subsequence cash flow at the end of year 2, we calculated the cash flow at each node on the tree, until 2006. We discounted all the cash flow at the risk free rate at 10%. The End of Year NPV of all the subsequence cash flow at Year 2 is calculated as $7,571,752, and the selling price of the equipment at end of 2 is $4,000,000, which is the salvage value. We found the NPV of selling the machine at end of Year 2 to be -$2,951,861 as of Year 0, which is negative. The APV of the project after adding the option turned out to be -$6,321,932. This negative APV suggest that the
The cumulative probability of outcomes from 4 to 20 is .6%. The outcome parameters were 4 to 20 because, we were specifically asked to look at the probability of Four-D rejecting >=4 or more shipments in 20 days.
4. Reported Date: Date has to be provided as based on the priority the issue will be resolved in the given time frame.
Solution (iii) Happy Star Ltd Tax worksheet for the financial year ended 31 December 2012
The sovereignty of sourcing, trading and cultivating healthy and safe seeds has been a tradition farmers have practiced for centuries. Food Inc. demonstrates how mega chemical corporations, including Bayer and Monsanto, have threated, with mob-like tactics with manipulation, legal and physical threats and social ostracizing in giving farmers no other choice but to comply with their demands or risk financial ruin. Jadwiga Lopata, an “activist who has worked for rural preservation since the mid-1980’s…” reports on the manipulating tactics such corporations have over Polish farmers. Land which has been leased to Polish farmers is being sold off in large scale. “This land is being bought by foreign companies of mainly Dutch, Danish, German and
So if John travel 21 May and returns on an afternoon flight on 25 May it would satisfy the requirement.
Q5. A store manager at a local supermarket wished to determine whether its 9 junior staff would be eligible to receive a Christmas bonus. The contractual agreement between the junior staff and management is that they will receive the bonus if all members of staff work the same number of hours. The manager looks at the accounts for the most recent 30-day period to determine if it is likely they will receive the bonus for the upcoming Christmas. Summary data is presented below (the number of hours worked is provided in brackets).
Client will demonstrate ability to increase her decision-making skills by choosing two colors and one out two art projects with maximum assistance within 60 seconds.
As informed by your team members this machine is being used to complete the government order. The order has to be completed in the coming two weeks. The company has limited tie up with hotels to host guests and during festival season the rates of these hotels are hikes. We generally book hotels in advance and no room is available in our tie up hotels. Hence I will have to arrange the lodging at Swan Inn which will charge us at normal rates. As there is insufficient budget to allocate to hotel stay, I will request you to take approval from your senior to sanction an additional amount of Rs.10, 000 for their stay till 14th September
What cash payments will be made by the company at the end of year seven?
*Column 3: Since we are in November, Cain can engage in a 3-month Forward to coincide with the payments at the end of January - (Ask Price of 0.934490) - From Exhibit 1
By paying Rs25/= ,he gets is a right (not an obligation) to buy Reliance at any time before the expiry at Rs1000/=, irrespective of cash market price. Hence the cost of his right is Rs1025/= and now before expiry suppose Reliance moves to Rs1125/= he makes Rs125/= on an investment of Rs25/=.
This company is the steel tube manufacturer for XYZ Steel, a giant steel company in India. The steel company has outsourced coil cutting and pipe manufacturing to many such industries. In the month beginning ABC Corp gets order for the steel tubes. This order consists of different SKUs and their respective quantities. Based on this order, ABC Corp orders rolled coils from XYZ Steel and then plan its schedule for coil slitting and pipe
Gupta's recommendation to use level annual production. Gupta believes that level production has two main advantages. First, under level production, Guna does not need seasonal hiring and layoff, thereby maintaining a more stable workforce. Secondly, level production can reduce the manufacturing risk, to decrease the profitability of equipment breakdown in peak season, due to a large amount of production request. The cost of equipment breakdown will be huge since Guna's production will be out of stock in the peak season. Based on Gupta's estimation, using level production will reduce the company's direct labor and other direct manufacturing cost from 34% to 29% of its purchases. The impact of Gupta's proposal is illustrated in Exhibit 8, Guna's note payables shows that company cannot clean up its