You own a local company that has special equipment for moving pianos. Your company has enough equipment to handle three pianos in a day. The number of requests to move pianos is a random variable with following distribution. → x f(x) 0 0.30 1 0.38 2 0.15 3 4 0.05 5 0.03 6 0.01

You own a local company that has special equipment for moving pianos. Your company has enough equipment to handle three pianos in a day. The number of requests to move pianos is a random variable with following distribution. → x f(x) 0 0.30 1 0.38 2 0.15 3 4 0.05 5 0.03 6 0.01

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter6: Statistical Inference

Section: Chapter Questions

Problem 27P: Duke Energy reported that the cost of electricity for an efficient home in a particular neighborhood...

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Your company manufactures two models of speakers, the Ultra Mini and the Big Stack. Demand for each depends partly on the price of the other. If one is expensive, then more people will buy the other. If p1 is the price of the Ultra Mini, and p2 is the price of the Big Stack, demand (quantity sold) for the Ultra Mini is given by q1 = 100,000 − 100p1 + 10p2 where q1 represents the number of Ultra Minis that will be sold in a year. The demand (quantity sold) for the Big Stack is given by q2 = 150,000 + 10p1 − 100p2. Find the prices for the Ultra Mini and the Big Stack that will maximize your total revenue. Remember that revenue for each item is price*quantity. (Round your answers to two decimal places.)
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A manager is trying to decide whether to buy one machine or two. If only one machine is purchased and demand proves to be excessive, the second machine can be purchased later. Some sales would be lost, however, because the lead time for delivery of this type of machine is six months. In addition, the cost per machine will be lower if both machines are purchased at the same time. The probability of low demand is estimated to be 0.20 and that of high demand to be 0.80. The after-tax NPV of the benefits from purchasing two machines together is $70,000 if demand is low and $170,000 if demand is high. If one machine is purchased and demand is low, the NPV is $100,000. If demand is high, the manager has three options: (1) doing nothing, which has an NPV of $100,000; (2) subcontracting, with an NPV of $140,000; and (3) buying the second machine, with an NPV of $120,000. What is the best decision and what is its expected payoff? Best decision is to buy nothing…
What are the important EOQ assumptions and comment if theseassumptions are realistic in a real-world situation. (c) CalcCo is a manufacturer of calculators, currently producing 200 perweek. One component for every calculator is a liquid crystal display(LCD), which the company purchases from LCDCo for £1 per LCD.CalcCo management wants to avoid any shortage of LCDs, since thiswould disrupt production, so LCDCo guarantees a delivery time of 0.5weeks on each order. The placement of each order is estimated torequire 1 hour of clerical time, with a direct cost of £15 per hour plusoverhead costs of another £5 per hour.What should be the Economic Order Quantity (EOQ), the reorder point(assume no safety stock) and the TC? To ensure production continuityCalcCo determined that the standard deviation of the lead timedemand is 20 LCDs. To ensure a 90% confidence of productioncontinuity the company has decided to introduce a safety stock. Whatis this stock and re-calculate the order point.(d)…
A manager is trying to decide whether to buy one machine or two. If only one machine is purchased and demand proves to be excessive, the second machine can be purchased later. Some sales would be lost, however, because the lead time for delivery of this type of machine is 6 months. In addition, the cost per machine will be lower if both machines are purchased at the same time. The probability of low demand is estimated to be 0.30 and that of high demand to be 0.70. The after-tax NPV of the benefits from purchasing two machines together is $90,000 if demand is low and $170,000 if demand is high. If one machine is purchased and demand is low, the NPV is $120,000. If demand is high, the manager has three options: (1) doing nothing, which has an NPV of $120,000; (2) subcontracting, with an NPV of $140,000; and (3) buying the second machine, with an NPV of $130,000. a. Draw a decision tree for this problem. b. What is the best decision and what is its expected payoff?
Duke Energy reported that the cost of electricity for an efficient home in a particular neighborhood of Cincinnati, Ohio, was $104 per month. A researcher believes that the cost of electricity for a comparable neighborhood in Chicago, Illinois, is higher. A sample of homes in this Chicago neighborhood will be taken and the sample mean monthly cost of electricity will be used to test the following null and alternative hypotheses. Assume the sample data lead to rejection of the null hypothesis. What would be your conclusion about the cost of electricity in the Chicago neighborhood? What is the Type I error in this situation? What are the consequences of making this error? What is the Type II error in this situation? What are the consequences of making this error?
Curry Rubber manufactures rubber bands for retail companies. The accounting manager has performed a regression analysis of past data. You notice that the formula has an R-squared of 0.68, a t-value of 2.2, and a standard error of the estimate of $218,200. The estimate for next quarter costs is $2,597,623. Calculate Standard Error as a % of predicted total cost which represents a measure of precision of his regression analysis? (Round your answer to one decimal place, i.e., 0.052 = 5.2%.)
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