Columbus grocery store faces demand for freshly squeezed pomegranate juice. The daily demand for freshly squeezed juice ranges from 10 to 20 gallons. The grocery store offers the juice in a special 1 gallon bottle. Each gallon costs $8 to make and is sold for $15. Any juice that is not sold by the end of the day can all be sold to a local food processor for $5. Compute the decision rule ratio using the marginal analysis (rounding it to two decimal places). O 0.53 O0.47 O0.50 D0.30 D0.70
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- Play Things is developing a new Lady Gaga doll. The company has made the following assumptions: The doll will sell for a random number of years from 1 to 10. Each of these 10 possibilities is equally likely. At the beginning of year 1, the potential market for the doll is two million. The potential market grows by an average of 4% per year. The company is 95% sure that the growth in the potential market during any year will be between 2.5% and 5.5%. It uses a normal distribution to model this. The company believes its share of the potential market during year 1 will be at worst 30%, most likely 50%, and at best 60%. It uses a triangular distribution to model this. The variable cost of producing a doll during year 1 has a triangular distribution with parameters 15, 17, and 20. The current selling price is 45. Each year, the variable cost of producing the doll will increase by an amount that is triangularly distributed with parameters 2.5%, 3%, and 3.5%. You can assume that once this change is generated, it will be the same for each year. You can also assume that the company will change its selling price by the same percentage each year. The fixed cost of developing the doll (which is incurred right away, at time 0) has a triangular distribution with parameters 5 million, 7.5 million, and 12 million. Right now there is one competitor in the market. During each year that begins with four or fewer competitors, there is a 25% chance that a new competitor will enter the market. Year t sales (for t 1) are determined as follows. Suppose that at the end of year t 1, n competitors are present (including Play Things). Then during year t, a fraction 0.9 0.1n of the company's loyal customers (last year's purchasers) will buy a doll from Play Things this year, and a fraction 0.2 0.04n of customers currently in the market ho did not purchase a doll last year will purchase a doll from Play Things this year. Adding these two provides the mean sales for this year. Then the actual sales this year is normally distributed with this mean and standard deviation equal to 7.5% of the mean. a. Use @RISK to estimate the expected NPV of this project. b. Use the percentiles in @ RISKs output to find an interval such that you are 95% certain that the companys actual NPV will be within this interval.Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.Answer the following MCQ questions. 1) When Delroy draw on well-developed procedures in his job of grocery store inventory clerk to determine which products to stock first, he is making which type of decision? a) Tactical b) Programmed c) Operational d) Non-Programmed 2) Identifying a problem and matching it with established routines and procedures for resolving it is a ? a) Tactical decision b) Programmed decision c) Operational decision d) Non-Programmed decision 3) Crystal is a marketing manager who is deciding how to allocate the financial resources among three different product launches over the next three months years. Crystal is making a ? a) Strategic decision b) Operational decision c) Tactical decision d) Opportunistic decision
- Wheels Distributors sells three types of tires to the commercial market. Type A. Type B and Type C. The anticipated payoffs are as follows for the three types of tires. Light Demand Moderate Demand Heavy Demand Probability 0.25 0.45 0.3 Tire Type A $325,000 $190,000 $170,000 B $300,000 $420,000 $400,000 C -$400,000 $240,000 $800,000 Construct a decision tree to help the management of Wheel Distributor make the appropriate decisions. This tree MUST be constructed in logical order with labels and net payoffs. Given the probabilities for the three types of tires and the expected monetary values, what decision should be made and what is that optimal expected value? What is the most should the firm be willing to pay to obtain further (perfect) information (EVPI) concerning the demand for the tires? 4. What decision should the firm…Zaki has been thinking about starting his own petrol station. He’s problem is to decide how large his petrol station should be. The annual return that will be achieved depends on whether the economy is good, fair, or poor. A payoff table has been constructed to illustrate this situation: (Business Quantitative Analysis) Determine using the best investment using the following decision criteria: a) Maximax criterion b) Maximin criterion c) Equally Likely criterion d) Minimax Regret criterion The probabilities of good market, average market, and poor market are 0.4, 0.5, and 0.1 respectively. Construct an expected opportunity loss table. Using minimum EOL as the decision criterion, determine the best alternativeAfter reading about economic predictions, Debbie Gibson (see problem #4) has assigned the probabilities that the economy will be strong, average, and weak at 0.2, 0.35, and 0.45 respectively. a) Using EMVs, what option should Debbie choose? What is the maximum EMV? b) Using EOL, what option should Debbie choose? What is the minimum EOL? c) Compute the EVPI and show that it is the same as the minimum EOL.
- 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) 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 Based on decision analysis under uncertainty, determine the best decision each of the model. Then compare all the model decision to make it overall conclusion.Leah Johnson, director of Urgent Care of Brookline, wants to increase capacity to provide low-cost flu shots but must decide whether to do so by hiring another full-time nurse or by using part-time nurses. The table below shows the expected costs of the two options for three possible demand levels: States of Nature (demand) Alternatives Low Medium High Hire full−time $320 $480 $700 Hire part−time $0 $350 $1,200 Probabilities 0.15 0.45 0.40 Part 2 a) The alternative with the least expected cost is ▼ a. Hire part-time b. Hire full-time The expected price of this alternative is $_______ (enter your answer as a whole number). Part 4 b) The appropriate decision tree for Leah Johnson is presented in Figure____?Camille forecasts to sell 575 units of the perfume she is selling by the first week of December. At the end of the 1st week of December, she was able to disposed 500 perfumes at Php150 each. Of these 500 units, she gave a total of 20 giveaways. The total cost for each perfume is Php120. Determine Camille’s net sales volume. *4802075500 Let’s say that last November you have sold 10,000 pieces of chrysanthemum at 25 pesos each. For every piece sold, you will be given a commission of 10%. How much was your total commission? *225,00025,00010,0002.50250,000
- A chef must decide how many chocolate lava cakes to prepare for the upcoming Mother's Day Dinner special. The chef can either prepare 50, 100, or 150 lava cakes. Assume that demand for the lava cakes can be 50, 100, or 150. Each dish costs $5 to make and is priced at for $7 on the menu. Unsold cakes are donated to a nearby charity center. Assume that there is no opportunity cost for lost sales. Which alternative should be chosen based on the maximax criterion?Watch Entice sells high end watches. The annual demand for the company’s product is 57,000 units.Ordering costs are $500 per order and carrying costs are $90 per unit, including $40 in the opportunitycost of holding inventory. It currently takes 2 weeks to supply an order to the store. The following tableshows the probability distribution of various demand levels during the 2-week purchase-order lead time:Total Demand Probability of Demand800 0.05900 0.21,000 0.51,100 0.21,200 0.05 Watch Entice does not hold any safety stock. If the company runs of stock, it has to rush order thecomputers at an additional cost of $10 per computer. What is the stock out cost?A. $21,600B. $14,400C. $7,200D. $17,400After reading about economic predictions, Debbie Gibson (see problem #4) has assigned the probabilities that the economy will be strong, average, and weak at 0.2, 0.35, and 0.45 respectively. a) Using EMVs, what option should Debbie choose? What is the maximum EMV? b) Using EOL, what option should Debbie choose? What is the minimum EOL? c) Compute the EVPI and show that it is the same as the minimum EOL. For Reference: (Problem # 4) Debbie Gibson is considering three investment options for a small inheritance that she has just received-stocks, bonds, and money market. The return on her investment will depend on the performance of the economy, which can be strong, average, or weak. If the market is strong her returns are 9% for stocks, 6% for bonds and 4% for money market. If the market is average her returns are 5% for stocks, 4% for bonds and 6% for money market. If the market is weak her returns are -7% for stocks, 2% for bonds and 1% for money market.