Answer is in bold, just need work shown. :) 5. A concessionaire for the local ballpark has developed a table of conditional values forthe various alternatives (stocking decision) and states of nature (size of crowd).States of Nature(size of crowd)LargeAverage Small$22,000 $12,000 - $2,000AlternativesLarge InventoryAverage Inventory $15,000 $12,000Small Inventory$6,000$ 9,000 $ 6,000 $5,000If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50for an average crowd, and 0.20 for a small crowd, determine:(a) the opportunity loss table.States of NatureLarge AverageAlternativesSmall8,000LargeAverageSmall7,00013,0006,0001,000 ANSWER

Find the given details below: Given Details States of Nature (Size of Crowd) Alternatives…

5. A concessionaire for the local ballpark has developed a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd). Alternatives Large Inventory Average Inventory | $15,000 | S12,000 Small Inventory States of Nature (size of crowd) Average | Small S22,000 S12,000 | - $2,000 $6,000 Large $ 9,000 S 6,000 $5,000 If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50 for an average crowd, and 0.20 for a small crowd, determine: (a) the opportunity loss table. States of Nature Large Average Small 8,000 Alternatives Large Average Small 7,000 13,000 6,000 1,000 ANSWER

5. A concessionaire for the local ballpark has developed a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd). Alternatives Large Inventory Average Inventory | $15,000 | S12,000 Small Inventory States of Nature (size of crowd) Average | Small S22,000 S12,000 | - $2,000 $6,000 Large $ 9,000 S 6,000 $5,000 If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50 for an average crowd, and 0.20 for a small crowd, determine: (a) the opportunity loss table. States of Nature Large Average Small 8,000 Alternatives Large Average Small 7,000 13,000 6,000 1,000 ANSWER

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 46P

See similar textbooks

Similar questions

Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
Q1 (a) Looking at the Sensitivity table above explain briefly by answering if the demand by any of these the classes is not satisfied. (b) Write down how many bookings the hotel should accept in each rental class?
Dart is a product of the Digby company. Digby's sales forecast for Dart is 2067 units. Digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Dart's Production After Adjustment have to be in order to have a 10% reserve of units available for sale? a. 2053 units b. 2274 units c. 2260 units d. 2067 units
Adele Weiss manages the campus flower shop. Flowers must be ordered three days in advance from her supplier in Mexico. Although Valentine’s Day is fast approaching, sales are almost entirely last-minute, impulse purchases. Advance sales are so small that Weiss has no way to estimate the probability of low (25 dozen), medium (60 dozen), or high (130 dozen) demand for red roses on the big day. She buys roses for $15 per dozen and sells them for $40 per dozen. Construct a payoff table. Which decision is indicated by each of the following decision criteria?a. Maximinb. Maximaxc. Laplaced. Minimax regret
Manuel Romo sells tires at the local shopping mall. Romo earns 20% commission on the first $500, 25% one the next $1,000 and 30% on sales over $1,500. Last weekend he sold $2,750 worth of tires. What is his total commission?
1. RBF, an emerging singer, is getting ready to cut his first album. The cost of recordingthe CD is Php 500,000 but copies are Php 500 apiece. If the album can be sold forPhp1,500 each, (a) how many CDs must be sold to break even? (b)What is thebreakeven point in dollars?RBF is confident that demand for his album will substantially exceed the break-evenpoint computed above. So, Mikey is contemplating having his album at a classier (andpricier) studio. The cost to record the CD would rise to Php 90,000. However, since thisnew studio works with very high volume, production costs would fall to Php 200 per CD.(c) What is the breakeven point for this new process?(d) Compare this process to the process proposed in the pre SHOW COMPLETE SOLUTION.
PROBLEM 02. The fine Garment company sells fashion clothing. The forecasted annual demand for its premium leather jacket is 1200. The order processing cost per order is $25, and the inventory holding cost is $50/item/year. How many leather jacket should it order in one shipment? The fine garment company want to use re-order point system. It has the order quantity set at 34.64. To allow uncertainties in delivery and it customer demand, it wishes to hold 4 week of demand as safety stock. What should be re-order point if the delivery lead time is 2 weeks?
A firm’s manager must decide whether to make or buy a certain item used in the production of vending machines. Making the item would involve annual lease costs of $150,000. Cost and volume estimates are as follows Make Buy Annual fixed cost $150,000 None Variable cost/unit $ 60 $ 80 Annual volume (units) 12,000 12,000 Given these numbers, should the firm buy or make this item? There is a possibility that volume could change in the future. At what volume would the manager be indifferent between making and buying?
A machine can be purchased at t = 0 for $20,000. The estimated life is 5 years, with an estimated salvage value of zero at that time. The average annual operating and maintenance expenses are expected to be $5,500. If MARR = 10%, what must the average annual revenues be in order to be indifferent between (a) purchasing the machine or (b) doing nothing?
David Austin recently purchased a chain of dry cleaners in northern Wisconsin. Although thebusiness is making a press, he could recognize a substantial increase in profits.The new press costs $15,400 to purchase and install and can press 40 shirts an hour (or 320 perday). David estimates that with the new press, it will cost $0.25 to launder and press each shirt.Customers are charged $1.10 per shirt.a. How many shirts will David have to press to break even?b If David cuts his price to $0.99 a shirt, he expects to be able to stabilize his customer base at250 shirts per day. How long would it take to break even at the reduced price of $0.99? ShouldDavid cut his price and buy the new press?
601 Ana Chavarria, front office manager at The Times Hotel, has completed a revenue management semi- nar at Keystone University and is preparing an argu- ment in favor of adopting this concept at The Times Hotel to present to Margaret Chu, the general man- ager. She begins by compiling a history of room occupancy and ADRS, which she hopes will reveal areas in which revenue management could help. She prepares an electronic spreadsheet that lists rooms sold with corresponding room rates and correlates the data to tourism activities in the area. Ana sends an analysis of revenue realized and revenue potential to Ms. Chu for review prior to their discussion After reviewing the analysis, Ms. Chu concludes, "This is just another scam; the industry is slow to adopt this," and disregards the entire report. She knows that occupancy percentage, ADR, and RevPAR are all you need to be efficient today, so why change? Ana passes Ms. Chu in the lobby, and Ms. Chu indicates her distrust of the revenue…