MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
12th Edition
ISBN: 9780134742366
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter A, Problem 24P
(a)
Summary Introduction
Interpretation: The company has decided to build a second plant, as full capacity has been achieved by the present manufacturing unit. The second plant may be large or small, located at a nearby area and the demand may be low or high, while
(b)
Summary Introduction
Interpretation: The company has decided to build a second plant, as full capacity has been achieved by the present manufacturing unit. The second plant may be large or small, located at a nearby area and the demand may be low or high, while
Concept Introduction: The measure of likelihood that an event will happen, in a random experiment is called probability.
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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…
The owner of a small business is considering three options: buying a computer,
leasing a computer, or getting along without a computer. Based on the information
obtained from the firm's accountant, the following payoff table (in terms of net.
profit) was developed:
State of Nature
State # 1
State # 2
State # 3
Alternative
(S1)
(S2)
(S3)
A1
6.
A2
АЗ
4
Based on the probability for each state of nature in previous question(the
probability for S1 to happen equals the probability of S2; the probability for S2 to
happen is three times of S3). What is the EVPI?
O 5.29
O Can't be computed with the given information
O 114
O 642
3. The manager for a
manufacturing
company must
recommend whether to construct a large plant,
construct a small plant or do nothing. He estimates the
long-run profits in $ as follows:
State of Nature
Alternative
Good
Average
Poor
Market($)
Market ($) Market ($)
Construct a
100,000
35,000
-60,000
large plant
Construct a
75,000
25,000
-40,000
small plant
Do nothing
-5,000
0
0
Probability 25%
50%
25%
Solve using:
A. Expected Opportunity Loss
B. Expected Value of Perfect Information
Chapter A Solutions
MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
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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