**Solved by: AllAcademicHelp.com**

QUESTION I Decision Analysis

Show all calculations to support your answers.

(a)Describe the advantage in using a payoff matrix to analyse decisions. Explain the steps required in developing such a matrix.(b)What advantage do decision trees provide and in what situations are they preferred to a payoff matrix?(c)George

Goleb is considering the purchase of two types of industrial robots.

The ROB1 is a large robot capable of performing a variety of tasks,

including welding and painting. The ROB1 is a smaller and slower robot,

but it has all the capabilities of ROB1. The robots will be used to

perform a variety of repair operations on large industrial equipment. Of

course, George can always do nothing and not buy any robots.

The

market for the repair operation could be either favourable or

unfavourable. If the market is favourable ROB1 is expected to return

550,000 profit and ROB2 S30,000 profit. If the market is unfavourable

ROB1 is expected to lead to a loss of $40,000 and ROB2 to a loss of

520,000.

1.Construct a payoff matrix showing the 3 possible

alternatives and the associated profits or losses under the 2 market

conditions.2.Showing all calculations, what is the optimum action and its expected payoff if George is an optimist?3.Showing all calculations, what is the optimum action and its expected payoff if George is a pessimist?4.Showing all calculations, what is the optimum action and its expected payoff if George follows the Laplace criterion?5.Showing all calculations, what is the optimum action and its expected payoff if George uses the criterion of regret?6.If

George believes that the probability of a favourable market is 0.6,

showing all calculations determine the optimum action and expected

return.7.What is the expected value of perfect information?

QUESTION 2 Value of information

Show

all calculations to support your answers. You may follow the methods

shown in the mp4 on Value of Info for a way to answer this question if

you wish.

Round all probability calculations to 2 decimal places.

Referring to Q1c, Recall the optimum action based on expected values was to purchase R081 with an EMV of S14,000.

George

Goleb is considering the possibilityof conducting a survey on the

market potential for industrial equipment repair using robots. The cost

of the survey is 55,000.

The market survey results can be

classified as positive or negative. Given past experience with the

market survey personnel, the conditional probabilities are gpositive

signallfavourable market = 0.9 and pktegative signallunfavouroble

market) = 0.8.

a)Revise the prior probabilities of 0.6 and 0.4 in light of these likely survey results.b)What is the posterior probability of a favourable market given a positive survey result?c)Calculate the EVSI and ENGSI.d)What is the maximum the firm should pay for the market survey?QUESTION 3 Simulation

This is a work integrated assessment item. The tasks are similar to what would be carried out in the workplace.

You

have just been hired as an analyst to assist the manager of ABC

airlines. Your first assignment is to examine and report on the

profitability and policies of the airline.

ABC Airlines flies a

six-passenger commuter flight once a day to Myrtle Beach.

Anon-refundable one-way fare with a reservation costs $79.

The

daily demand and probability distribution for this flight are shown

below along with the probabilitydistribution of no-shows. A no-show has a

reservation but does not arrive at the gate and forfeits the fare.

If

there are not enough seats for a passenger at the gate ABC Airlines

refunds his or her fare and also provides $50 compensation. The fixed

cost for each flight is $350, regardless of the number of passengers.

1.

Set up a simulation model and calculate ABC’s profit each day for a

month (30 days) and the average profit per flight. There are to be no

numbers in the model (only in the data section), and only formulas in

the model. Print in WORD the output and then the formulas.2.ABC

would like to investigate the profitability of varying the fare and the

compensation for overbooking. What is your recommendation?3.Write

report with your comments on the profitability of the airline and any

recommendations you may have for improvement. (no more than 300 words

but you may also include any variations in your spreadsheet to

demonstrate your points). Address your report to the manager and sign

off

QUESTION 4 Regression Analysis

Pike College

is a small business school that offers an MBA program. The main entrance

criterion for admission to the MBA program is the Graduate

ManagementAdmission Test (GMAT) score (maximum score =800). The

following table provides the GPAs (Grade Point Averages)of 12 students

who have graduated recently along with their GMAT scores and ages.

1.Using

Excel, perform three regression analyses to regress GPA against GMAT

score, then against Age, then against both of them simultaneously. Paste

your results into Word. State the cost equation from each. Analyse and

comment on the results of each regression as you perform it and

determine the best one to use as a basis for future use.2.If you had

to settle for the results of a simple regression, which one would you

use and why? Explain any reservations you might have with your

selection.3.A new graduate student has a GMAT score of 600 and is 29

years old. Using the multiple regression output what is this student’s

predicted GPA? QUESTIONS CVP Analysis

Guide to student marks: 20: 6 for a, 4 for b (2+2), 4 for c, 6 for d

1.Product

A sells for $12 per unit. The variable cost is S6 per unit. Fixed costs

are $1,200. What is the breakeven point in (i) units, and (ii) dollars?2.How many units are required to earn a target level of profit before tax of $600? What is the margin of safety?3.What profit would be earned by selling 250 units?4.A

second product B is added, selling for S20 per unit with a variable

cost of $8. Total fixed costs for both products are $5,200. A and B are

sold in the ratio of 2 of A to 1 of B. Given a tax rate of 30c in the

dollar, how many units of each product are required to earn a profit

after tax of S1,400?

Let’s block ads! (Why?)

**READY TO PLACE AN ORDER**

CLICK HERE TO ORDER 100% ORIGINAL PAPERS FROM AllAcademicHelp.com <<

## Leave a Reply