McHardee Press publishes the Fast Food Menu Book and wishes to determine how many copies to print. There is a fixed cost of $5,000 to produce the book and the incremental profit per copy is $0.40. Any unsold copies of the book can be sold at salvage at a $.60 loss. Sales for this edition are estimated to be normally distributed. The most likely sales volume is 12,000 copies and they believe there is a 7% chance that sales will exceed 20,000. How many copies should be printed? If any unsold copies can be sold at salvage at a $.70 loss, how many copies should be printed?
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: In light of the data given in the inquiry, we can sum up the given choices as referenced in the…
Q: A local real estate investor in Montego Bay is considering three alternative investments: a motel, a…
A: Given- Payoff table-
Q: A manufacturing plant has reached full capacity. The company must build a second plant—either small…
A: a. The rectangular nodes represent the decision nodes and the circular ones are chance nodes.
Q: Mary is considering the possibility of opening a small dress shop on Avenue, a few blocks from the…
A: solution to a and b decision for EMV = medium sized shop as it gives maximum value
Q: The following payoff table provides profits based on various possible decision alternatives adn…
A:
Q: The owner of the Burger Doodle Restaurant is considering two ways to expand operations: open a…
A: Formula:
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: Expected monetary value (EMV) is a risk management technique to help evaluate and analyze chances in…
Q: A manager is trying to decide whether to build a small, medium or large facility. Demand can be low,…
A: According to the given information- Alternatives Low Demand Average Demand Hit Demand Small…
Q: Dwayne Whitten, president of Whitten Industries, is considering whether to build a manufacturing…
A: Part a & b
Q: oseph Biggs owns his own ice cream truck and lives 30 miles from a Florida beach resort. The sale of…
A: a)
Q: Problem 1: You are a manager of CircuitTown, which sells Xbox2010. The demand for Xbox2010 in the…
A: Given- Xbox2010 demand- 200 units with a probability of 0.8 400 units with a probability of 0.2
Q: A bakery must decide how many pies to prepare for the upcoming weekend. The bakery has the option to…
A: Given Information; Cost Price of a pie = $ 5 Selling Price of a pie = $ 7 Demand Probability…
Q: A manager is trying to decide whether to build a small, medium or large facility. Demand can be low,…
A: A decision tree is a layout of the potential results of a progression of related decisions. It…
Q: Problem 13-11 (Algorithmic) Following is the payoff table for the Pittsburgh Development…
A: Decision alternative Strong Demand (S1) (million $) Weak Demand (S2) (million $) Small Complex…
Q: Fenton and Farrah Friendly, husband-and-wife car dealers, are soon going to open a new dealership.…
A: In probability analysis, the expected value can be calculated by multiplying each possible…
Q: ACME, Inc. firm was trying to decide which of the four projects it should submit a bid for, There…
A: The decision tree is shown below.
Q: Peter Martin will help his brother who wants to open a grocery store. Peter initially believes there…
A: Let, I1 be favorable research, I2 be unfavorable research, S1 be successful store and S2 be…
Q: Kroft Food Products is attempting to decide whether it should introduce a new line of salad…
A: The tree is comprised of a progression of nodes and branches. At the primary hub on the left, the…
Q: White Valley Ski Resort is planning the ski lift operation for its new ski resort. Management is…
A: Revenue from one lift over 98 days season = 250*98*20 = $ 490,000 (at 100% capacity utilization)…
Q: 1. Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium…
A: given
Q: Louisiana is busy designing new lottery scratchoff games. In the latest game, Bayou Boondoggle, the…
A: Given that: The players are instructed to scratch off one spot from A, B, and C. A can reveal…
Q: Johnson Chemicals is considering two options for itssupplier portfolio. Option 1 uses two local…
A:
Q: The lease of Theme Park, Ic., is about to expire. Management must decide whether to renew the lease…
A: The amount that a person would be ready to pay to obtain perfect information is known as the…
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: The decision tree is a strong and well-known method for separating and foreseeing. A decision tree…
Q: A global economist hired by Telecomp, the U.S.-basedcomputer manufacturer in Problem S1-1, estimates…
A: The situation being the same or improving is in our favour and its probability together is 0.7 which…
Q: Kroft Food Products is attempting to decide whether it should introduce a new line of salad…
A: Following is the decision tree based on the given information:
Q: A retailer is deciding how many units of a certain product to stock. The historical probability…
A: In the given question, the probability of selling different units is given. The data is as follows.…
Q: The lease of Theme Park, Inc., is about to expire. Management must decide whether to renew the lease…
A: Given data is
Q: A firm must decide whether to construct a small, medium, or large stamping plant. A…
A: As per policy only 3 subparts are solved.
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: A decision tree is a graphical illustration of all the desirable answers to a decision based on…
Q: Place-Plus, a real estate development firm, is considering several alternative de projects. These…
A: Given that: Interest Rate Project Decline Stable Increase Office park 0.5 1.7 4.5 Office…
Q: Johnson Chemicals is considering two options for itssupplier portfolio. Option I uses two local…
A: The term "probability" simply means "the chance of something happening." When we're unsure about the…
Q: Referring to the payoff table below answer the questions given below: State of Nature…
A: Here, 4 decision alternatives are there. So, one decision node and 4 chance nodes will be there. For…
Q: Decision matrix below consists of COSTS expected, determine which alternative is dominant using with…
A:
Q: The city of Winnipeg is considering whether to build a new public ice rink. This rink would have a…
A:
Q: A businessman must decide whether to open a new mini grocery branch or simply extend the number of…
A: A decision tree is a tree having branches and bounded solution where we plot different option as in…
Q: Cliff Branch’s firm was trying to decide if it should submit a proposal for Project 1, Project 2,…
A:
Q: The director of career advising at Orange Community College wants to use decision analysis to…
A: Economic Condition Degree Program Recession Average Good Robust Graphic Design 145,000…
Q: Kryoneriperfume company is considering the followingtwo alternatives for the supply of vetiver oil…
A: To know which alternative is better, We need to calculate the probabilities of two suppliers (No. of…
Q: The fleet manager for the Southern Company, an electrical utility based in Atlanta (parent of…
A:
Q: Eunice, in The scenario, wants to determine how each of the 3 companies will decide on possible new…
A: Given data: If a company will launch Product 1 - Gain 125,000 when successful - Lose 125,000 when…
Q: What are your recommendations for this sequence of decisions for HDG?
A: One recommends the HDG company to buy an apartment rather than the land.
Q: Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium Project.…
A: The expected value of decision 3 is
Q: Johnson Chemicals is considering two options for its supplier portfolio. Option 1 uses two local…
A: Probability is the calculation of how likely is the possibility of occurrence of any event or…
Q: A new minor league baseball team is coming to town and the owners have decided to build a new…
A: Expected value is a proportion of what you ought to hope to get per game over the long haul. The…
Q: Joel De Castro, CEO of De Castro Enterprises, Inc. (DCEI), is considering a special offer to…
A: In the differentiation strategy, a business aims to develop products and services that are different…
McHardee Press publishes the Fast Food Menu Book and wishes to determine how many copies to print. There is a fixed cost of $5,000 to produce the book and the incremental profit per copy is $0.40. Any unsold copies of the book can be sold at salvage at a $.60 loss. Sales for this edition are estimated to be
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
- The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.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?
- Swell Productions is sponsoring an outdoor conclave for owners of collectible and classic Fords. The concession stand in the T-Bird area will sell clothing such as T-shirts and official Thunderbird racing jerseys. Jerseys are purchased from Columbia Products for $40 each and are sold during the event for $75 each. If any jerseys are left over, they can be returned to Columbia for a refund of $30 each. Jersey sales depend on the weather, attendance, and other variables. The following table shows the probability of various sales quantities. How many jerseys should Swell Productions order from Columbia for this one-time event?Sales Quantity Probability Quantity Sales Probability100 0.05 400 0.34200 0.11 500 0.11300 0.34 600 0.05Jeffrey Mogul is a Hollywood film producer, and he is currently evaluating a script by a new screenwriter and director, Betty Jo Thurston. Jeffrey knows that the probability of a film by a new director being a success is about .10 and that the probability it will flop is .90. The studio accounting department estimates that if this film is a hit, it will make $25 million in profit, whereas if it is a box office failure, it will lose $8 million. Jeffrey would like to hire noted film critic Dick Roper to read the script and assess its chances of success. Roper is generally able to correctly predict a successful film 70% of the time and correctly predict an unsuccessful film 80% of the time. Roper wants a fee of $1 million. Determine whether Roper should be hired, the strategy Mogul should follow if Roper is hired, and the expected value.MegaJoy Corp. is planning to open a new video arcade. It has narrowed the choices to a large or small arcade.(All costs and revenues in this problem are expressed in thousands of dollars.) The cost of a large arcade is $400, and the cost of a small arcade is $300.It has forecast that the demand will be low with probability 0.3 and high with probability 0.7.If MegaJoy builds a small arcade and the demand is high, then it expects revenues of $540. If MegaJoy builds a large arcade and the demand is low, then it has two alternatives: do nothing and earn revenue of $380, or reduce prices and earn revenues of $450. a. Draw a decision tree for this problem. b. Which choice yields the maximum expected money value?( Show calculation) c. A consulting firm has offered to perform reseach and forecast the demand fo MegaJoy. The firm will charge $8(thouthand) for its services, and it claims that the information will be 100% accurate. Should MegaJoy pay for the consulting services? Justify your…
- Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium Project. Amounts are in millions of dollars. State of Nature Decision Alternative Strong Demand S1 Weak Demand S2 Small complex, d1 8 7 Medium complex, d2 14 5 Large complex, d3 20 -9 Suppose PDC is optimistic about the potential for the luxury high-rise condominium complex and that this optimism leads to an initial subjective probability assessment of 0.8 that demand will be strong (S1) and a corresponding probability of 0.2 that demand will be weak (S2). Assume the decision alternative to build the large condominium complex was found to be optimal using the expected value approach. Also, a sensitivity analysis was conducted for the payoffs associated with this decision alternative. It was found that the large complex remained optimal as long as the payoff for the strong demand was greater than or equal to $17.5 million and as long as the payoff for…A firm must decide whether to construct a small, medium, or large stamping plant. A consultant’sreport indicates a .20 probability that demand will be low and an .80 probability that demand willbe high.If the firm builds a small facility and demand turns out to be low, the net present value will be$42 million. If demand turns out to be high, the firm can either subcontract and realize the net present value of $42 million or expand greatly for a net present value of $48 million.The firm could build a medium-size facility as a hedge: If demand turns out to be low, its netpresent value is estimated at $22 million; if demand turns out to be high, the firm could do nothingand realize a net present value of $46 million, or it could expand and realize a net present value of$50 million.If the firm builds a large facility and demand is low, the net present value will be – $20 million,whereas high demand will result in a net present value of $72 million.a. Analyze this problem using a decision…A businessman must decide whether to open a new mini grocery branch or simply extend the number of hours of its operation on its existing branch with a payoff of Php150,000. According to his friend, demand at a new location can either be low or high, which he probabilities are estimated to be 35% and 65%, respectively. If a new branch is opened and demand proves to be high, the businessman may choose to operate 24hrs (payoff is Php350, 000) or to operate 12hrs (payoff is Php200,000). If a new branch is opened and demand proves to be low, there is no need to operate on a 24-hr basis but instead, they will just stick to 12-hr operation with payoff of Php100,000 or enhance marketing strategy through advertising. Projected response to advertising may either be favorable or not favorable, with estimated probabilities of 40% and 60%, respectively. If demand is favorable, the payoff grows to Php310,000 and if the response in unfavorable, the payoff is Php120,000. The cost of advertising…
- Machado Construction is considering two options for its supplier portfolio. Option 1 uses two local suppliers. Each has a "unique-event" risk of 8%, and the probability of a "super-even" that would disable both at the same time is estimated to be 2.5%. Option 2 uses two suppliers located in different countries. Each has a "unique-event" risk of 18%, and the probability of a "super-event" that would disable both at the same time is estimated to be 1.2%. (a) What is the probability that both suppliers will be disrupted using option 1? (b) What is the probability that both suppliers will be disrupted using option 2? (c) Which option would provide the lowest risk of a total shutdown?A firm must decide whether to construct a small, medium or large stamping plant. A consultant’s report indicates a 0.20 probability that demand will be low and 0.80 that demand will be high. If the firm builds a small facility and demand turns out to be low, the Net Present Value (NPV) willbe $42M. If demand turns out to be high, the firm can either subcontract and realize the NPV of $42M orexpand greatly for a Net Present Value of $48M. The firm could build a medium size facility as a hedge: if demand turns out to be low, its NPV is estimated at $22M; if demand turns out to be high, the firm could do nothing and realize a NPV of $46M, or could expand and realize a NPV of $50M. If the firm builds a large facility and demand is low, the NPV will be ($20M), whereas high demand will result in a NPV of $72M. Compute the EVPI *Johnson Chemicals is considering two options for itssupplier portfolio. Option 1 uses two local suppliers. Each has a “unique-event” risk of 5%, and the probability of a “super-event” that would disable both at the same time is estimated to be 1.5%. Option 2 uses two suppliers located in different countries.Each has a “unique-event” risk of 13%, and the probability of a “super-event” that would disable both at the same time is esti-mated to be 0.2%. a) What is the probability that both suppliers will be disruptedusing option 1?b) What is the probability that both suppliers will be disruptedusing option 2?c) Which option would provide the lowest risk of a total shutdown?