Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
12th Edition
ISBN: 9780134742205
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Question
Chapter A, Problem 20P
Summary Introduction
Interpretation: A decision tree for the three options described in problem 19 needs to be drawn. The management’s decision in order to achieve the highest expected payoff needs to be found out.
Concept Introduction: The measure of likelihood that an event will happen, in a random experiment is called probability.
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Students have asked these similar questions
Define the goal of decision analysis and how different decision makers may approach risk in their terms of assessment utility.
Leisure Corporation’s decision to produce a new line of recreational products resulted in the need to construct either a small plant or a large plant. The best plant size depends on how the marketplace reacts to the new product line. To conduct an analysis, marketing management has decided to view the possible long-run demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollars:
Profits
Long-Run Demand
Low
Medium
High
Small Plant
150
200
200
Large Plant
50
200
500
If Leisure Corporation has an extremely pessimistic outlook on demand, would it build a small or a large plant?
If Leisure Corporation wanted to minimize the maximum opportunity losses (regrets), would it build a small or a large plant?
Bakery Products is considering the introduction of a new line of products. In order to produce the new line, the bakery is considering either a major or minor renovation of the current plant. Bakery Productshas the option of not developing the new line at all. The decision alternatives are shown in the payoff table below as well as the states of nature and probabilities. Payoffs are profits;
Before making the final decision, Bakery Products can pay a market research firm $500.00 to survey consumer attitudes towards the company's products. The results can be either “vibrant” or “limp”. Thereliability of the company, based on past performance, is given below.
That is: P(V|F) = 0.80;P(V|N) = 0.60;P(V|U) = 0.30; P(L|F) = 0.20;P(L|N) = 0.40;P(L|U) = 0.70;
After you have computed the revised probabilities round to two decimal places
a) Construct the appropriate decision tree to help Bakery products make the appropriate decisions. This tree must be constructed in logical order with labels…
Chapter A Solutions
Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
Ch. A - Mary Williams, owner of Williams Products, is...Ch. A - Prob. 2PCh. A - An interactive television service that costs $10...Ch. A - A restaurant is considering adding fresh brook...Ch. A - Spartan Castings must implement a manufacturing...Ch. A - A news clipping service is considering...Ch. A - Prob. 7PCh. A - Techno Corporation is currently manufacturing an...Ch. A - The Tri-County Generation and Transmission...Ch. A - Prob. 10P
Ch. A - Tri-County G&T sells 150,000 MWh per year of...Ch. A - The Forsite Company is screening three ideas for...Ch. A - Prob. 13PCh. A - Prob. 14PCh. A - Janice Gould of Krebs Consulting is in the process...Ch. A - Build-Rite Construction has received favorable...Ch. A - Prob. 17PCh. A - Prob. 18PCh. A - Prob. 20PCh. A - Prob. 21PCh. A - Prob. 22PCh. A - Prob. 24P
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