Answered: If factor A is given a weight of 0.2…

If factor A is given a weight of 0.2 and factor B a weight of 0.4, what does that imply about factor B when compared to factor A?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 46P

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
II. + James Scott is considering the possibility of opening a small outfit shop on Sta. Maria District, a few blocks from St. Green Ville College. She has located on a mall that attracts students. To open a small shop, medium sized shop, or no shop at all are her options. The market can be good, average, or bad. The probabilities for these three possibilities are 30% for good market, 50% for an average market, and 20% for bad market. The profit or loss for the said market conditions are given in the table below; ALTERNATIVE Small Shop Medium Sized Shop No Shop GOOD 150,000 200,000 0 AVERAGE 50,000 70,000 0 a) Calculate the Expected Value of Perfect Information (EVPI) b) What do you recommend? BAD -80,000 -120,000 0
A sugar manufacturing company started production in the year 2012. At that year, it produced 40000 tons. Its goal was to increase production each subsequent year by 5% of its production of the previous year. a) Determine the production of the year 2019. b) What is the total production until the end of the year 2018? c) When will the annual production reach about 56284 tons per year?
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 0.25, 0.40 and 0.35, respectively. A small facility is expected to earn an after-tax net present value of just $18,000 if demand is low. If demand is average, the small facility is expected to earn $75,000; it can be increased to medium size to earn a net present value of $60,000. If demand is high, the small facility is expected to earn $75,000 and can be expanded to medium $60,000 or large to earn $125,000. A medium-sized facility is expected to lose an estimated $25,000 if demand is low and earn $140,000 if demand is average. If demand is high, the medium-sized facility is expected to earn a net present value of $150,000; it can be expanded to a large size for a net payoff of $145,000. If a large facility is build and demand is high, earnings are expected to be $220,000. If demand is average for the large facility, the present…
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 manager is trying to decide whether to build a small, medium or large facility. Demand can be low, average, or hit, with the estimated probabilities being 0.25, 0.40, and 0.35 respectively A small facility is expected to earn an after-tax net present value of just $18,000 if demand is low. If demand is average, the small facility is expected to earn $75,000; it can be increased to medium size to earn a net present value of $60,000. If demand is high, the small facility is expected to earn $75,000 and can be expanded to medium size to earn $60,000 or large to earn $125,000. A medium-size facility is expected to lose an estimated $25,000 if demand is low and earn $140,000 if demand is average. If demand is high, the medium-size facility is expected to earn a net present value of $150,000; it can be expanded to a large size for a net payoff of $145,000. If a large facility is built and demand is high, earnings are expected to be $220,000. If demand is average for the large facility,…
A manager is trying to decide whether to build a small, medium or large facility. Demand can be low, average, or hit, with the estimated probabilities being 0.25, 0.40, and 0.35 respectively A small facility is expected to earn an after-tax net present value of just $18,000 if demand is low. If demand is average, the small facility is expected to earn $75,000; it can be increased to medium size to earn a net present value of $60,000. If demand is high, the small facility is expected to earn $75,000 and can be expanded to medium size to earn $60,000 or to large to earn $125,000. A medium-size facility is expected to lose an estimated $25,000 if demand is low and earn $140,000 if demand is average. If demand is high, the medium-size facility is expected to earn a net present value of $150,000; it can be expanded to a large size for a net payoff of $145,000. If a large facility is built and demand is high, earnings are expected to be $220,000. If demand is average for the large facility,…
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?
Suppose you plan to buy a new car and wish to pick a best one from a list of candidate models, shown in Table 1. To make this decision, you have designated a specialist to rate these models for you. In Table 2, each model has been given a score from 1 (the least desired) to 10 (the most desired) according to respective criteria. The weight of each criterion, representing its importance, is given in the bottom row of Table 1. Please calculate the overall score for each car model and find out the best alternative with the highest overall score. Table 1 Alternatives and Criteria of Selecting Car Price Fuel Efficiency Maintenance Access Interior Aesthetics Overall Score 1. Toyota Camry 8 8 7 9 2. Hyundai Elantra 9 8 5 8 3.Skoda Octavia 7 7 7 8 4.VW Passat 7 7 8 7 5.Citroen C4 7 8 7 9 Weights 0.3 0.4 0.2 0.1 China Eastern Airlines…
1) A television network earns an average of $1.6 million each season from a hit program and loses an average of $400,000 each season on a program that turns out to be a flop, and of all programs picked up by this network in recent years, 25% turn out to be hits and 75% turn out to be flops. a) Construct a decision tree to help the television network identify the strategy that maximizes itsexpected profit in responding to a newly proposed television program. Make sure to label all decisionand chance nodes and include appropriate costs, payoffs and probabilities. b) What should the network do? What is their expected profit? c) The network can conduct market research to determine whether a program will be a hit or a flop. If the market research report is perfectly reliable, what is the most the network should be willing to pay for it? 2) A buyer for a large sporting goods store chain must place orders for professional footballs with the football manufacturer six months prior to the…
1) A television network earns an average of $1.6 million each season from a hit program and loses an averageof $400,000 each season on a program that turns out to be a flop, and of all programs picked up by thisnetwork in recent years, 25% turn out to be hits and 75% turn out to be flops. a) Construct a decision tree to help the television network identify the strategy that maximizes itsexpected profit in responding to a newly proposed television program. Make sure to label all decision and chance nodes and include appropriate costs, payoffs and probabilities. b) What should the network do? What is their expected profit? c) The network can conduct market research to determine whether a program will be a hit or a flop. Ifthe market research report is perfectly reliable, what is the most the network should be willing to payfor it? 2) A buyer for a large sporting goods store chain must place orders for professional footballs with the footballmanufacturer six months prior to the time…