Edwards Machine Tools needs to purchase a new machine. The basic model is slower but costs less, whereasthe advanced model is faster but costs more. Profitability will depend on future demand. The following tablepresents an estimate of profits over the next three years.DecisionBasic modelAdvanced modelDecision alternativeBasic modelAdvanced modelFill in the table below for maximum and minimum profit payoffs under each model. Round your answers tothe nearest dollar.Opportunity Loss MatrixDecision alternativeBasic modelAdvanced modelMaximumLow$75,000$60,000LowDemand VolumeCalculate the amounts foregone by not adopting the optimal course of action for each possible demandlevel. Determine the maximum opportunity cost for each model. Fill in the table below. If your answer iszero, enter "0". Round your answers to the nearest dollar.Minimum$Future eventsMedium$80,000$130,000MediumHigh$170,000$220,000HighMaximumGiven the uncertainty associated with the demand volume, and no other information to work with, whatdecision would you make?

Find the Given details below: Given details: Decision Demand Volume Low Medium High Basic…

Answered: Edwards Machine Tools needs to purchase…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Mavis and John have joined forces to start M&J Food Products, a processor of packaged shredded lettuce for institutional use. John has years of food processing experience, and Mavis has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think a largely manual process will have monthly fixed cost of $50,000and a variable cost of $2.50 per bag. They expect to sell 75,000 bags of lettuce per month. They expect to sell the shredded lettuce for $3.25 per 5-pound bag. John and Mavis has been contacted by a vendor to consider a more mechanized process. This new process will have monthly fixed cost of $125,000 per month with a variable cost of $1.75 per bag. Based on the above scenario: Should…
From a purchasing standpoint, when comparing an item with low complexity/importance with one with a high complexity/ importance item you would generally change your approach in what way? Choose one answer. For high complexity/importance, focus forecast on the near term For high complexity/importance, include senior decision makers in key decisions For low complexity/importance, build deep collaboration 1 and 2 only 1 and 2 and 3
I draw 5 cards from a deck (replacing each cardimmediately after it is drawn). I receive $4 for each heartthat is drawn. Find the mean and variance of my total payoff.
Many organizations have differentiated themselves in the marketplace by their "low cost" value proposition to customers (i.e. Spirit Airlines, Dollar Tree, Walmart, and Aldi). To achieve this, the organization fine-tunes their business model to remove as many overhead costs and unnecessary costs so it may pass those savings on to its customers. Select a domestic or international business that has a "low cost" value proposition to its customers and consider the following questions: How does it market itself? How does a low-cost operating structure make them stand out and succeed in the market? Is "low cost" a sustainable model for this company? Evaluate this strategy from an ethical perspective.
Edwards Machine Tools needs to purchase a new machine. The basic model is slower but costs less, whereas the advanced model is faster but costs more. Profitability will depend on future demand. The following table presents an estimate of profits over the next three years. Demand Volume Decision Low Medium High Basic model $90,000 $110,000 $155,000 Advanced model $60,000 $135,000 $190,000 Fill in the table below for maximum and minimum profit payoffs under each model. Round your answers to the nearest dollar. Decision alternative Maximum Minimum Basic model $ $ Advanced model $ $ Calculate the amounts foregone by not adopting the optimal course of action for each possible demand level. Determine the maximum opportunity cost for each model. Fill in the table below. If your answer is zero, enter "0". Round your answers to the nearest dollar. Opportunity Loss Matrix Future events Decision alternative Low Medium High Maximum…
The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. Decision Alternative If S1 d₁ d₂ States of Nature then ? $1 240 90 90 15 The probabilities for the states of nature are P(S₁) = 0.65, P(s₂) = 0.15, and P(s3) = 0.20. (a) What is the optimal decision strategy if perfect information were available? ; If S₂ then ? 90 65 ; If S3 then ? (b) What is the expected value for the decision strategy developed in part (a)? î (c) Using the expected value approach, what is the recommended decision without perfect information? What is its expected value? The recommended decision without perfect information is ? EV = (d) What is the expected value of perfect information? EVPI = î
1iii- Please solve this question. Thanks
A farmer is trying to decide if continuing to farm is the correct thing to do. Yields on his fields have been declining over the past several seasons. He has an offer on the table from a corporate farmer to lease his land for the season for $15,000. Whether or not he accepts this offer depends on how well his fields will produce and the market value of his crops. If yield is high, the farmer will make $50,000 and there is a 10% possibility of this occurring. If yield is medium, the farmer will make $20,000 and there is a 50% possibility of this occurring. If yield is low, the farmer will make $12,000 and there is a 40% possibility of this occurring. Draw a decision tree for this problem. What should the farmer do according to the decision tree? If the farmer could get more information that would help him predict his yield, what is the maximum amount that he should pay for this information?
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A) Rogers Inc.is considering investing $320,000 in hardware and software to develop abusiness-to-business (B2B) application. The company expects the portal to save $40,000 eachyear for next seven years of its useful life.You are required to calculate the payback period of this investment proposal.B) What are the other investment evaluation methods you know?

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