Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN: 9781305627734
Author: Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher: Cengage Learning
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Chapter 15, Problem 2P
Southland Corporation’s decision to produce a new line of recreational products resulted in the need to construct either a small plant or a large plant. The best selection of plant size depends on how the marketplace reacts to the new product line. To conduct an analysis, marketing management has decided to view the possible long-run demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollars:
- a. What is the decision to be made, and what is the chance
event for Southland’s problem? - b. Construct a decision tree.
- c. Recommend a decision based on the use of the optimistic, conservative, and minimax regret approaches.
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Students have asked these similar questions
The Deinell-Forging-Corporation manufactures four highly confidential products
that it supplies to ammunition firms that hold RSA government contracts. Each
product must pass through the following departments before being shipped:
forging, cleaning, weighing, and inspection. The time requirement in hours for
each unit and its corresponding profit value are summarised in the following
table:
Department
Product Forging Cleaning Weighing Inspection
|хм122
Unit profit (Rand)
0.6
0.3
0.3
0.5
11000
XJ312
1.5
4
2.
14000
RM122
RM126
1.5
2.
1.
0.5
17000
1.
1.5
13000
Monthly available production in each department and the minimum monthly
production requirement to fulfil these contracts are:
Сараcity
Departme (hours) Product Minimum production level
Forging
Cleaning
Weighing
Inspectior 10000 RM126
13000 XM122
130
15000 XJ312
80
24000 RM122
260
320
The production manager needs to specify production levels for each product for
the next month. Formulate this problem to help him maximise the total…
What is the EMV of the best decision before he collects additional information?
Oriole Toys’ management is considering eliminating product A, which has been showing a loss for several years. The company’s annual income statement, is as follows:
A
B
C
Total
Sales
$2,295,000 $1,406,000 $1,812,000 $5,513,000
Variable expenses
1,696,000 601,500 1,089,300 3,386,800
Contribution margin
$599,000 $804,500 $722,700 $2,126,200
Advertising expense
$517,000 $427,000 $521,000 $1,465,000
Depreciation expense
17,400 10,400 22,000 49,800
Corporate expenses
93,500 81,900 106,700 282,100
Total fixed expenses
$627,900 $519,300 $649,700 $1,796,900
Operating income
$(28,900) $285,200 $73,000 $329,300
Advertising expense - Specific to each product.
Depreciation expense - Specific to each product; no other use available, no resale value.
Corporate expenses - Allocated based on number of employees.
(a)
Restate the income statement in segment margin format.
Chapter 15 Solutions
Essentials of Business Analytics (MindTap Course List)
Ch. 15 - Prob. 1PCh. 15 - Southland Corporation’s decision to produce a new...Ch. 15 - Amy Lloyd is interested in leasing a new Honda and...Ch. 15 - Investment advisors estimated the stock market...Ch. 15 - Hudson Corporation is considering three options...Ch. 15 - Prob. 6PCh. 15 - Myrtle Air Express decided to offer direct service...Ch. 15 - Video Tech is considering marketing one of two new...Ch. 15 - Seneca Hill Winery recently purchased land for the...Ch. 15 - Hemmingway, Inc. is considering a $5 million...
Ch. 15 - The following profit payoff table was presented in...Ch. 15 - Suppose that you are given a decision situation...Ch. 15 - A firm has three investment alternatives. Payoffs...Ch. 15 - Alexander Industries is considering purchasing an...Ch. 15 - In a certain state lottery, a lottery ticket costs...Ch. 15 - Three decision makers have assessed utilities for...Ch. 15 - In Problem 22, if P(s1) = 0.25, P(s2) = 0.50, and...Ch. 15 - Translate the following monetary payoffs into...Ch. 15 - Consider a decision maker who is comfortable with...
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