What is a strategic decision? What are its characteristics? Explain Strategic decisions are complex in nature. (c) Explain how this strategic decision will help Tata Motors to repositioning themselves in the market.

Assume that the operations manager of a small semi-conductor manufacturer wants to run a Simulation model to better understand the uncertainties related to cost and demand for a particular product. He assumes that the total cost per month could be anywhere between $150,000 and $200,000 with equal likelihood. He also assumes that the demand is normally distributed with a mean of 5,000 items per month and a standard deviation of 1,000. Each item is sold for $95. a) Use the random numbers in the following table to simulate the costs, revenues and profits per month. Use Random Number A to generate the costs and Random Number B to generate the revenues per month and then calculate the profit as the difference between revenues and costs. Complete the table by reporting the minimum, maximum and average profit per month according to this simulation. Trial 1 2 3 4 5 6 7 8 9 10 you b) Can Random A 0.23 you 0.04 0.14 0.07 0.03 0.67 0.26 0.03 0.83 0.32 Cost Random B 0.75 0.89 0.82 0.33 0.96 0.67…

Highknob Co is thinking about introducing a new product.Below are the possible levels of unit sales and the probabilities of their occurrence.  What is the expected value of the new product?   Possible Market Reaction Sales in Units Probabilities Low Response 20 .10 Moderate Response 40 .20 High Response 65 .40 Very High Response 80 .30

13. Gadgeteer Inc. is planning the market strategy for their new widget. They could bring it directly to market. This would result in a 40% chance of a successful launch (and therefore a 60% chance of an unsuccessful one). A successful launch would result in a NPV of $22 million. A failed one would result in a negative NPV of $9 million. Or, they could test market the product for two years (thus delaying any potential launch by two years). The test marketing would also cost a present value of $1.5 million. However, it would increase the probability of success to 75%. The relevant discount rate is 11%. Should Gadgeteer test market the widget?