The operations manager for a water taxi company wants to decide whether to purchase a small, medium, or large new boatfor the company. The manager estimates that the annual profits (in thousands of dollars) will vary depending upon whetherpassenger demand is low, moderate, or high, as shown in the following table.оооBoatnoneSmallMediumLow Medium4938LargeProbability 0.3Demand216082530.3High6890118If the company uses the expected value approach, which size boat will it decide to purchase?smallmediumlarge0.4

It is a decision-making method and it is calculated by multiplying the possible outcomes of an…

Answered: The operations manager for a water taxi…

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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The Gorman Manufacturing Company must decide whether to manufacture a component part at its plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in ten thousand of pesos): state of nature state of nature state of nature Decision Alternative Low Demand S1 Medium DEmand S2 High demand S3 Manufacture, d1 -100 200 500 Purchase, d2 50 225 350 The state-of-nature probabilities are P(s1 ) = 0.35, P(s2 ) = 0.35, and P(s3) = 0.30. a. Use a decision tree to recommend a decision b. Use EVPI to determine whether XY Manufacturing Company should attempt to obtain a better estimate of demand. c. What is the probability that the market research report will be favorable? A test market study of the potential demand for the product is expected to report either a favorable (F) or unfavorable (U) condition. The relevant conditional probabilities are as follows: P…
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The operations manager for a water taxi company wants to decide whether to purchase a small, medium, or large new boat for the company. The manager estimates that the annual profits (in thousands of dollars) will vary depending upon whether passenger demand is low, moderate, or high, as shown in the following table. Demand Boat Low Medium High Small 50 57 70 Medium 37 79 89 Large 17 51 119 Probability 0.3 0.3 0.4 If the company uses the expected value approach, which size boat will it decide to purchase? O small 000 medium large O none
b6 need urgent in 15 minutes
The University of Miami bookstore stocks textbooks in preparation for sales each semester. It normally relies on departmental forecasts and preregistration records to determine how many copies of a text are needed. Preregistration shows 85 operations management students enrolled, but bookstore manager Vaidy Jayaraman has second thoughts, based on his intuition and some historical evidence. Vaidy believes that the distribution of sales may range from 65 to 85 units, according to the following probability model: Demand Probability 65 0.10 Stock 70 0.30 65 This textbook costs the bookstore $82 and sells for $112. Any unsold copies can be returned to the publisher, less a restocking fee and shipping, for a net refund of $30. a) Based on the given information, Vaidy's conditional profits table for the bookstore is: 65 p=0.10 75 0.20 70 p=0.30 80 0.10 Demand 75 p=0.20 80 p = 0.10 85 p=0.30 85 0.30
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Please include an excel sheet showing calculations

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