Mick Karra is the manager of MCZ Drilling products which produces a variety of especially valves for oil field equipment. Recent activity in the oil fields has cause demand to increase drastically, and a decision has been made to open a new manufacturing facility. Three locations are being considered, and the size of the facility would not be the same in each location Thus, overtime might be necessary at times. The folowing table gives the total monthly cost (in 1000s) for each possible location under each demand posibility. The probabilities for the demand levels have been determined to be 20% for low demand, 30% for medium demand, and 50% for high demand Demand is Low Demand is medium Demand is High Ardmore, OK 85 110 150 Sweetwater, TX 90 100 120 Lake Charles, LA 110 120 130 (a) Which location would be selected based on the optimistic criterion? (b) which location would be selected based on the pessimistic criterion? (c) which location would be selected based on the minimax regret criterion?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Mick Karra is the manager of MCZ Drilling products which produces a variety of especially valves for oil field equipment. Recent activity in the oil fields has cause demand to increase drastically, and a decision has been made to open a new manufacturing facility. Three locations are being considered, and the size of the facility would not be the same in each location Thus, overtime might be necessary at times. The folowing table gives the total monthly cost (in 1000s) for each possible location under each demand posibility. The probabilities for the demand levels have been determined to be 20% for low demand, 30% for medium demand, and 50% for high demand
| Demand is Low | Demand is medium | Demand is High | |
| Ardmore, OK | 85 | 110 | 150 |
| Sweetwater, TX | 90 | 100 | 120 |
| Lake Charles, LA | 110 | 120 | 130 |
(a) Which location would be selected based on the optimistic criterion?
(b) which location would be selected based on the pessimistic criterion?
(c) which location would be selected based on the minimax regret criterion?
(d) which location should be selected to minimize the expected cost of operation?
(e) How much is a perfect
(f) which location would minimize the expected opportunity loss?
(g) what is the expected value of perfect information in this situation?
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