Refer to the tables below. Management has 3 options for lot sizing in their procurement strategy. Based on the eventualmarket demands, the profits are given in the table.PAYOFF TABLE High DemandSmall LotMedium LotLarge LotRelateiveFrequencies100300550P1ModerateDemand10015075P2Low Demand80-50-450P3Determine the expected value (EMV) if the Medium Lot size is selected.The historical relative frequencies associated with the market demands is given as:P1 = 0.35P2 = 0.3Assume that the 3 market demands in the table represent ALL possible outcomes. Round your answer to one decimalplace, if applicable.

A procurement strategy is a plan that shows how an organization will acquire the goods and services…

Answered: Refer to the tables below. Management…

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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Similar questions

Q24
The decision to place a certain volume of business with a supplier does not have to be based on sound set of criteria/ True False
How might an awareness of how a quantity changes over time help make a decision in daily life? What examples can you think of related to something measurable changing over time from experience?
Direct Materials Variances Bellingham Company produces a product that requires seven standard pounds per unit. The standard price is $10.5 per pound. If 5,900 units used 43,000 pounds, which were purchased at $10.08 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Direct materials price variance $ 18,060 X Favorable b. Direct materials quantity variance $ 106,050 X Unfavorable c. Direct materials cost variance $ 124,110 X Favorable Feedback Check My Work Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit). Cost variance is the difference between the actual and standard total cost.
Deborah Kellogg buys Breathalyzer test sets for the Winter Park Police Department. The quality of the test sets from her two suppliers is indicated in the following table: For example, the probability of getting a batch of tests that are 1% defective from Winter Park Technology is .70. Because Kellogg orders 10,000 tests per order, this would mean that there is a .70 probability of getting 100 defective tests out of the 10,000 tests if Winter Park Technology is used to fill the order. A defective Breathalyzer test set can be repaired for $0.50. Although the quality of the test sets of the second supplier, Dayton Enterprises, is lower, it will sell an order of 10,000 test sets for $37 less than Winter Park. a) Develop a Decision Treeb) Which supplier should Kellog use? Percent Defective Probability for Winter Park Technology Probability for Dayton Enterprises 1 0.70 0.30 3 0.20 0.30 5 0.10 0.40
Birka Styles & Co is introducing a new line of beachwear for their retail stores. The manager needs to decide how many lots of the new beachwear to order for their stores. The marketing came up with a payoff table (see below) considering information about the price, projected sales level, and cost of inventory and ordering. DEMAND Order size Low Medium High 1 lot 12,000 15,000 15,000 2 lots 9,000 25,000 35,000 3 lots 6,000 35,000 60,000 The owner found out that: P(Low demand) = 1/3; P(Med demand) = 1/2; P(High demand) = 1/6. Which of the following decision is NOT true? A)The best decision is to order 3 lots for a payoff of $29,500. The probabilities gave me enough information to perform a Laplace approach. B)The best decision is to order 3 lots for a payoff of $29,500. The probabilities gave me enough information to perform the EMV approach. C)The EVPI is $2,000. D)The EVwPI is $31,500.

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