Compute the EVPI 2- Determine the range over which each alternative would be best in terms of the value of P ( low demand )

Consider a model in which two products, x and y, are produced. There are 100 pounds of material and 80 hours of labor available. It requires 2 pounds of material and 1 hour of labor to produce a unit of x, and 4 pounds of material and 5 hours of labor to produce a unit of y. The profit for x is Php150 per unit, and the profit for y is Php250 per unit. (round off your answer to the nearest unit) a. Construct a linear programming model b. How many x and y will be produced to achieve the maximum profit. c. How much is the maximum profit in the problem.

A manager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilities being 0.40, 0.35, and 0.25, respectively. A small facility is expected to earn an after-tax net present value of just $13,000 if demand is low. If demand is average, the small facility is expected to earn $15,000; it can be increased to medium size to earn a net present value of $30,000. If demand is high, the small facility is expected to earn $25,000 and can be expanded to medium size to earn $50,000 or to large size to earn $100,000. A medium-sized facility is expected to lose an estimated $50,000 if demand is low and earn $100,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $125,000; it can be expanded to a large size for a net payoff of $175,000. If a large facility is built and demand is high, earnings are expected to be $180,000. If demand is average for the large…

What would be the best way to estimate whether a piece of land could be used to manage an existing (at a profit) in the relatively short- and long-run? Explain what information you would need to make the decision what would be a “Second best” alternative to the criteria you picked first?

Phillip​ Witt, president of Witt Input​ Devices, wishes to create a portfolio of local suppliers for his new line of keyboards. Suppose that Phillip is willing to use one local supplier and up to two more located in other territories within the country. This would reduce the probability of a​ "super-event" that might shut down all suppliers at the same time at least 2 weeks to 0.5​%, but due to increased distance the annual costs for managing each of the distant suppliers would be ​$25,000 ​(still ​$15 comma 000 for the local​ supplier). A total shutdown would cost the company approximately ​$400,000. He estimates the​ "unique-event" risk for any of the suppliers to be 5​%. Assuming that the local supplier would be the first one​ chosen, how many suppliers should Witt Input Devices​ use? Find the EMV for alternatives using​ 1, 2, or 3 suppliers. ​EMV(1)equals=​$ ​(Enter your response rounded to the nearest whole​number.) ​EMV(2)equals=​$ ​(Enter your response rounded to the nearest…

Cheryl Druehl​ Retailers, Inc., must decide whether to build a small or a large facility at a new location in Fairfax. Demand at the location will either be low or​ high, with probabilities 0.3 and 0.7​,respectively. If Cheryl builds a small facility and demand proves to be​ high, she then has the option of expanding the facility. If a small facility is built and demand proves to be​ high, and then the retailer expands the​ facility, the payoff is ​$230,000. If a small facility is built and demand proves to be​ high, but Cheryl then decides not to expand the​ facility, the payoff is ​$203,000.   If a small facility is built and demand proves to be​ low, then there is no option to expand and the payoff is ​$250,000. If a large facility is built and demand proves to be​ low, Cheryl then has the option of stimulating demand through local advertising. If she does not exercise this​ option, then the payoff is $40,000. If she does exercise the advertising​ option, then the response to…

1.  Kirsten is trying to decide where to go for her well-earned vacation. She would like to camp, but if the weather is bad, she will have to go to a motel. Given the costs and probabilities of bad weather given below, which destination should she choose?   Camping cost Motel cost Probability of bad weather Nevada $21.2 $80.9 0.2 Oregon $15.9 $84.6 0.4 California $30 $95 0.1   a. California, because its EMV = $33.14 b. Nevada, because its EMV = $33.14 c. California, because its EMV = $36.5 d. Any of the 3 choices. e. Oregon, because its EMV = $43.38 f. Nevada, because its EMV = $43.38 g. None of the 3 choices. h. Oregon, because its EMV is $36.50.

An oil company must decide whether or not to drill an oil well in a particular area that they already own. The decision maker (DM) believes that the area could be dry, reasonably good or a bonanza. See data in the table which shows the gross revenues for the oil well that is found. Decision Drill $0 Abandon $0 Probability 0.3 Dry (D) Seismic Results No structure(N) Open(0) Closed (C) Drilling costs 40M. The company can take a series of seismic soundings (at a cost of 12M) to determine the underlying geological structure. The results will be either "no structure", "open structure or "closed structure". The reliability of the testing company is as follows that is, this reflects their historical performance. Reasonably good(G) $85 $0 0.3 Note that if the test result is "no structure" the company can sell the land to a developer for 50 m. otherwise (for the other results) it can abandon the drilling idea at no benefit to itself. Dry(d) 0.7 0.2 Bonanza(B) 0.1 $200 m SO 0.4 Conditional…

(d) The company only has 4 workstations available. If it only operates its 4stations, how many weeks does it need to meet the production requirements?(e) The company has other contracts it needs to satisfy. Working on themugs more than 4 weeks means it will have to cancel another contract,incurring a penalty of $4,500. Each new workstation costs the company$2,500. What should the company do: cancel the contract or buy therequired workstations?

George Fine, owner of Fine Manufacturing, is consideringthe introduction of a new product line. George has consideredfactors such as costs of raw materials, new equipment, andrequirements of a new production process. He estimates that thevariable costs of each unit produced would be $8 and fi xed costswould be $70,000.(a) If the selling price is set at $20 each, how many unitshave to be produced and sold for Fine Manufacturingto break even? Use both graphical and algebraicapproaches.(b) If the selling price of the product is set at $18 per unit,Fine Manufacturing expects to sell 15,000 units. Whatwould be the total contribution to profi t from this productat this price?(c) Fine Manufacturing estimates that if it off ers the productat the original target price of $20 per unit, the companywill sell about 12,000 units. Which pricing strategy—$18per unit or $20 per unit—will yield a higher contributionto profi t?(d) Identify additional factors that George Fine shouldconsider in deciding…