{"id":40760,"date":"2022-03-12T06:24:06","date_gmt":"2022-03-12T06:24:06","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/compute-the-expected-value-for-the-profit-associated-with-the-two\/"},"modified":"2022-03-12T06:24:06","modified_gmt":"2022-03-12T06:24:06","slug":"compute-the-expected-value-for-the-profit-associated-with-the-two","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/compute-the-expected-value-for-the-profit-associated-with-the-two\/","title":{"rendered":"compute the expected value for the profit associated with the two"},"content":{"rendered":"
\n

Week 3 Individual Assignment<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

Assignment Title:<\/span><\/strong>\u00a0Expansion Strategy and Establishing a Re-order Point\u00a0<\/span><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

Assignment Points: 50<\/span><\/strong><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

Purpose of Assignment:<\/span><\/strong>\u00a0This assignment has two cases. The first case is on expansion strategy. Managers constantly have to make decisions under uncertainty. This assignment gives students an opportunity to use the mean and standard deviation of probability distributions to make a decision on expansion strategy. The second case is on determining at which point a manager should re-order a printer so that he or she doesn\u2019t run out-of-stock. The second case uses normal distribution. The first case demonstrates application of statistics in finance and the second case demonstrates application of statistics in operations management.<\/span><\/p>\n

\u00a0<\/span><\/p>\n

Assignment text:<\/span><\/strong><\/p>\n

(25 points)<\/span><\/em><\/strong>\u00a0Case 1 \u2013 Decision-Making Under Uncertainty \u2013 Expansion Strategy<\/span><\/strong><\/p>\n

The Bell Computer Company is considering a plant expansion that will enable the company to begin production of a new computer product. You have obtained your MBA from the University of Phoenix and as a vice-president you must determine whether to make the expansion a medium- or large- scale project. The demand for the new product involves an uncertainty, which for planning purposes may be low demand, medium demand, or high demand. The probability estimates for the demands are 0.20, 0.50, and 0.30, respectively. The firm\u2019s planners developed profit forecasts for the medium- and large- scale expansion projects as given on the Excel file spreadsheet named Case 1.<\/span><\/p>\n

\u00a0<\/span><\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/span>Compute the expected value for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of maximizing the expected profit?<\/span><\/p>\n

\u00a0<\/span><\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/span>Compute the variation for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk or uncertainty?<\/span><\/p>\n

\u00a0<\/span><\/strong><\/p>\n

(25 points)\u00a0<\/span><\/em><\/strong>Case 2 \u2013 Establishing a Reorder Point<\/span><\/strong><\/p>\n

In this case,\u00a0Kyle Bits and Bytes<\/em>, a retailer of computing products sells a variety of computer-related products. One of Kyle\u2019s most popular products is an HP laser printer. The average weekly demand is 200. Lead time (Lead time<\/em><\/strong>\u00a0is defined as the amount of time between when the order is placed and when it is delivered.) for a new order from the manufacturer to arrive is 1 week. If the demand for printers were constant, the retailer would reorder when there were exactly 200 printers in inventory. However, Kyle learned in his Operations Management class that the demand is a random variable. An analysis of previous weeks reveals that the weekly demand standard deviation is 30. Kyle knows that if a customer wants to buy an HP laser printer but he has none available, he will lose that sale plus possibly additional sales. He wants the probability of running short (stock-out) in any week to be no more than 6%. What should be the reorder point set at? In other words, how many HP laser printers should he have in stock when he reorders from the manufacturer?<\/span><\/p>\n

\u00a0<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Week 3 Individual Assignment \u00a0 Assignment Title:\u00a0Expansion Strategy and Establishing a Re-order Point\u00a0 \u00a0 Assignment Points: 50 \u00a0 Purpose of Assignment:\u00a0This assignment has two cases. The first case is on expansion strategy. Managers constantly have to make decisions under uncertainty. This assignment gives students an opportunity to use the mean and standard deviation of probability […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-40760","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/40760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=40760"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/40760\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=40760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=40760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=40760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}