Chemitronix Ltd. is a microchips manufacturing company. It was found that the business is at the maturity stage, demanding some change. After rigorous research, management came up with the following decision variables Expansion: 45% chance of gaining 1,500,000; 55% chance of losing X New Product: 50% chance of gaining 900,000; 50% chance of losing 545959 What must have been the value of expansion loss if expansion and new product will result to the same expected monetary values?
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: In light of the data given in the inquiry, we can sum up the given choices as referenced in the…
Q: Happy Company is going to introduce one of the three new products (alternative) to the market: A, B…
A: The given data is
Q: What is the best decision alternative under Maximax criterion? (Provide complete decision table…
A: Given data:
Q: Chemitronix Ltd. is a microchips manufacturing company. It was found that the business is at the…
A: SOLUTION:
Q: A business owner is planning to strategize his company's growth. He can either buy, rent, or lease a…
A: Here the option 2 is correct. Using the Laplace's method the company go for buy decision.
Q: A landlord can either lease for one or two years or sell offices outrightly for K100 million with…
A: Note: - Since the exact question that has to be answered is not specified, we will answer the first…
Q: A decision maker's worst option has an expected value of $1,000, and her best option has an expected…
A: Formula:- The expected value of perfect information= Expected value with perfect information -…
Q: oseph Biggs owns his own ice cream truck and lives 30 miles from a Florida beach resort. The sale of…
A: a)
Q: Hemmingway, Inc., is considering a $5 million research and development (R&D) project. Profit…
A: At Node 4, for building facility, the profit at high demand is 34 million with 0.5 probability, at…
Q: Many decision problems have the following simplestructure. A decision maker has two possible…
A: Consider a generalized decision maker's problem. The decision-maker has to decide between decision 1…
Q: Ellie Daniels has $200,000 and is considering three mutual funds for investment—a global fund, an…
A: Please note that for the index fund, the net values are quoted for 2 years. For the other two, the…
Q: A manager is trying to decide whether to build a small, medium, or large facility. Demand can be…
A: The maximin practice implicates choosing the option that maximizes all the minimum pay-off possible.…
Q: ACME, Inc. firm was trying to decide which of the four projects it should submit a bid for, There…
A: The decision tree is shown below.
Q: A manager is deciding whether to build a small or a large facility. Much depends on the future…
A: As mentioned in the table, based on the demand, the payoffs can be different for small or large…
Q: Suppose that you are planning to build a house in the country. It will be a brick, one-story…
A: 1) Following activities are involved in the project are sequenced in their proper order: 1-…
Q: Suppose you want to mine for gold. Your decisions are to build a mine or not, and to hire a…
A: THE ANSWER IS AS BELOW:
Q: Louisiana is busy designing new lottery scratchoff games. In the latest game, Bayou Boondoggle, the…
A: Given that: The players are instructed to scratch off one spot from A, B, and C. A can reveal…
Q: A project has a PV at status of $55000 at the status date and a BAC of $180000 at the end of the…
A: Given- Planned Value(PV) = $55,000 Budget at Completion(BAC) = $180,000 Actual Cost(AC) = $121,000…
Q: The probability of business doing good is 0.7 and the probability of slow business is 0.3. Using…
A: He can easily buy the factory as the probability is 0.7 of good. ANSWER is BUY.
Q: A(n) _____ environment lacks some information, but it is possible to assign probabilities to the…
A: Functional Organization: It revolves around what functions an organization needs to perform like…
Q: Calculate the expected value and standard deviation for the following distribution: a 10% chance of…
A: The question is related to Expected value and Standard deviation. Expected Value = Value ×…
Q: The lease of Theme Park, Inc., is about to expire. Management must decide whether to renew the lease…
A: Formula: Answer:
Q: The following payoff table shows a profit for a decision analysis problem with two decision…
A: Formula: Answer:
Q: ou have an option to build a new mall or remove it. A new mall will cost P500M as investment to…
A: THE ANSWER IS AS BELOW:
Q: Ralph Dodd, a concessionaire for the local ballpark, has developed a table of conditional values for…
A: Find the given details below: Given details: Large Average Small Probability 0.3 0.5 0.2…
Q: The CEO of Lucky Petroleum Co. has been considering to open a new gasoline statioin. He must decide…
A: Find the Given details below: Given details: Size of Station Good Market Fair Market Poor…
Q: Two opposing armies, Red and Blue, must each decide whether to attack or defend. These decisions are…
A: Given, gains of one = loss of another this means probability of attack by one = probability of…
Q: Referring to the payoff table below answer the questions given below: State of Nature…
A: Here, 4 decision alternatives are there. So, one decision node and 4 chance nodes will be there. For…
Q: A company plans to manufacture a product and sell it for $3.00 per unit. Equipment to manufacture…
A: Given: Per unit Selling price 3 Less: Variable cost Direct material 0.85 Direct labor…
Q: Mazen is not keen on collecting facts and information while solving problems. He is spontaneous in…
A: Decision-making is tied in with choosing the request for execution of explanations dependent on…
Q: A manufacturing firm is looking to invest in new equipment. Options A and B have a known initial…
A: Uniform annual Savings implies the pinnacle interest or energy savings that happen in a given year…
Q: How is EMV calculated for these steps. What is the probability and impact in these questions. 1)…
A: 1) Yes, I should play. The expected net monetary value is $ 1780 2) I should try again, because the…
Q: For a certain civil engineering system, it is sought to maximize the benefits, which is given by the…
A: Decision variable: Suppose- x be the amount of resource type 1 y be the amount of resource type…
Q: Suppose we are considering the question of how much capacity to build in the face of uncertain…
A: The probability of various demand levels is as follows: Demand – x units Probability of x 1 0…
Q: Cliff Colby wants to determine whether his South Japanoil field will yield oil. He has hired…
A:
Q: (a) What choice should be made by the optimistic decision maker? (b) What choice should be made by…
A: As per Bartleby guidelines, we can only solve the first three subparts of one question at a…
Q: Carlisle Tire and Rubber, Inc., is considering expanding production to meet potential increases in…
A: Predictable profit in situation decision is - Concept new plant=probability in situation market…
Q: The Gorman Manufacturing Company must decide whether to manufacture a component part at its plant or…
A: As there are two alternatives, two branch nodes are drawn. For each alternative, there are 3 states…
Q: Muscat Company is a multinational company dealing with various perfumes in Sultanate of Oman. The…
A: Return on investment (ROI) is a financial metric that is commonly used to determine the likelihood…
Q: * 00 Miles is considering buying a new pickup truck for his lawn service firm. The economy in town…
A: Decision theory helps the managers to analyse the available alternatives and understand the logic…
Q: A small building contractor has recently experienced two successive years in which work…
A: Formula: Answer:
Q: Texas Petroleum Company is a producer of crude oil that is considering two drilling projects with…
A: There are two projects, and one project needs to be chosen. Apart from this, the utility indexes…
Q: A firm has three investment alternatives. The payoff from each alternative (in thousand Ringgit)…
A: Expected value approach reaches to the optimal solution by multiplying the probability with the…
Q: A business owner is planning to strategize his company's growth. He can either buy, rent, or lease a…
A: Given information- The probability of business doing good = 0.7 The probability of a slow business…
Q: A company wanting to build a hotel in downtown St. John's needs to buy two adjacent properties. The…
A:
Q: A company sells its products to wholesalers in batches of 1,000 units only. The daily demand for its…
A: Given data is
Q: A decision maker is faced with a choice between two projects, both of which have start-up costs in…
A: The question is related to Capital Budgeting. The details of two projects are given. We will…
Q: A company faces a decision with respect to a product (codenamed M997) developed by one of its…
A: Node Diagram-
Chemitronix Ltd. is a microchips manufacturing company. It was found that the business is at the maturity stage, demanding some change. After rigorous research, management came up with the following decision variables Expansion: 45% chance of gaining 1,500,000; 55% chance of losing X New Product: 50% chance of gaining 900,000; 50% chance of losing 545959 What must have been the value of expansion loss if expansion and new product will result to the same expected monetary values?
Step by step
Solved in 2 steps
- A. A company wants to produce a souvenir with a marketing life of six months. Uncertainty surrounds the likely sales volume as well as the fixed costs of the venture as shown below: Sales units Probability Contrn. /unit Probability Fixed cost K7 K5 100 000 0.3 80 000 0.6 60 000 0.1 1.0 0.5 0.5 1.0 Determine the expected value of the contribution K400 000 K450 000 K500 000 Probability 0.2 0.5 0.3 1.0Consider the COST matrix with prior probabilities below. 0.20 0.30 0.50 S1 S2 S3 a1 1 4 a2 4 -1 a3 Which action should be taken based on an expected value criterion? a3 a1 a2 all of the other choicesAqua Man Company manufactures and sells a single product. Planned and actual production in its first year of operation was 100,000 units. Planned and actual costs for the year were as follows: Manufacturing Non-manufacturing Variable P600,000 P500,000 Fixed P400,000 P300,000 The company sold 85,000 units of product at a selling price of P30 per unit. Using absorption costing, the company’s operating profit was Select one: a. P1,020,000 b. P975,000 c. P900,000 d. P750,000
- The XY Manufacturing Company must decide whether to manufacture a component part at its plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in ten thousand of pesos): Decision Alternative Manufacture, d₁ Purchase, d₂ Low Demand $1 -100 50 State of Nature Medium Demand S2 200 225 High Demand S3 500 350 MA The state-of-nature probabilities are P(s₁) = 0.35, P(s₂) = 0.35, and P(S3) = 0.30. a. Use a decision tree to recommend a decision. b. Use EVPI to determine whether XY Manufacturing Company should attempt to obtain a better estimate of demand.A payoff table is given as: S1 S2 S3 D1 250 750 500 D2 300 -250 1200 D3 500 500 600 (a) What choice should be made by the optimistic decision maker? (b) What choice should be made by the conservative decision maker? (c) What decision should be made under minimal regret? (d) If the probabilities of d1, d2, and d3 are .2, .5, and .3, respectively, then what choice should be made under expected value?A company wants to produce a souvenir with a marketing life of sixmonths. Uncertainty surrounds the likely sales volume as well as thefixed costs of the venture as shown below:Sales units Probability Contrn. /unit Probability Fixed cost Probability100 000 0.3 K 7 0.5 K400 000 0.2 Page 5 of 80 000 0.6 K 5 0.5 K450 000 0.560 000 0.1 K500 000 0.31.0 1.0 1.0 Determine the expected value of the contribution
- This is the same payoff table used in questions 2 and 3. Below is a payoff table that lists four mortgage options: Decision 1-year ARM 3-year ARM 5-year Arm 30-year fixed Rates Rise $66,645 $62,857 $55,895 $52,276 Outcomes Rates Stable $43,650 $47,698 $50,894 $52,276 4) Which of the following decisions has the best average payoff? CA. 3-year ARM B. 1-year ARM CC. 5-year ARM CD. 30-year Fixed Rates Fall $38,560 $42,726 $48,134 $52,276The medical team at Birzeit Hospital are not sure whether to buy the COVID-19 vaccine from supplier A, B, or C. The analysis of previous experience dealing with the three suppliers reveals the following vaccine quality: Percent of ineffective vaccines Probability for Supplier A Probability for Supplier B Probability for Supplier C 2 0.60 0.50 0.70 5 0.30 0.30 0.00 7 0.10 0.20 0.30 The hospital buys 25000 vaccines each year which means that the probability to get 2% ineffective vaccines is 0.60 from supplier A, 0.50 from supplier B, and 0.70 from supplier C. Develop a decision tree to show your recommended alternative (supplier).Option 2: Raise prices by 50%. If this occurs, there is a 75% chance that an Entrepreneur will set up in competition this year. The board’s estimate of its annual profit in this situation would be as follows: 2A: With new competitor 2B: Without new competitor Probability Profit (Sh.) Probability Profit (Sh.) 0.25 150,000 0.5 200,000 0.5 120,000 0.3 150,000 0.25 80,000 0.2 100,000 Option 3: Expand the car park quickly at a cost of Sh. 50,000 keeping prices theSame. The profits are then estimated to be like 2B above, except that the probabilities would be 0.6, 0.3 and 0.1 respectively. Required: Draw a decision tree for the above problem, including all the relevant data. Using expected values analyze the decision tree and recommend the best option to the owners of the car park.
- The water pump company has succeeded in introducing a water pump that saves electricity, is easy to install, and is durable (guaranteed). Its high quality has given the company an early edge in the local and national markets, but the entry of highly skilled competitors may occur within the next 3 years. Assume that the income and expense relationship of the company is as follows: TR = 22000Q - 15.6Q2 MR = dTR / dQ = 22000 - 31.2Q TC = 300000 + 4640Q + 10Q2 MC = dTC / dQ = 4640 + 20Q Where TR is income (in thousands of rupiah), Q is quantity (in units), MR is marginal income (in thousands of rupiah), TC is total cost, including a risk-adjusted normal rate of return on investment (in thousands of rupiah), and MC is the marginal cost (in thousands of rupiah). a. Compute: the profit-maximizing price-output combination. b. Compute: long-run equilibrium high-price / low-output. c. Compute: long-run low-price / high-output equilibriumThe Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent on the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): State of Nature Low Demand Medium Demand High Demand Decision Alternative s 1 s 2 s 3 Manufacture, d 1 -20 40 100 Purchase, d 2 10 45 70 The state-of-nature probabilities are P(s1) = 0.25, P(s2) = 0.25, and P(s3) = 0.50 (a) Use a decision tree to recommend a decision. (b) Use EVPI to determine whether Gorman should attempt to obtain a better estimate of demand. Enter your answer in thousands dollars. For example, an answer of $200 thousands should be entered as 200,000. Gorman attempt to obtain a better estimate of demand, as the additional information could be worth up to $ for Gorman. (c) A test market study of the potential…c. From the following decision tree, develop a payoff table and calculate: * Maximax, Minimax regret, Maximin, and EMV. ORs. 50,000 Good conditions (0.60) Poor conditions (0.40) -O Rs. 30,000 Apartment Building Good conditions (0.60) O Rs. 100,000 Office building Poor conditions (0.40) Purchase ORs -40,000 Warchouse Good conditions (0.60) Rs.30, 000 Poor conditions (0.40) O Rs. 10,000