Spreadsheet Modeling and Decision Analysis: A Practical Introduction to Business Analytics
7th Edition
ISBN: 9781285418681
Author: Cliff Ragsdale
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 22QP
Summary Introduction
To determine: The sensitivity report using solver.
a)
Summary Introduction
To determine: Whether the optimal solution is unique.
b)
Summary Introduction
To determine: The total cost increase if it is forced to ship from location 1 to location 3.
c)
Summary Introduction
To determine: The increase in total cost for the given information.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Sarah has a startup business that makes two distinct bird feeders that she has designed. Sarah is planning on operating a small factory to build the bird feeders. She is looking at two possible locations, A and B. If she chooses location A, the lease on the building will be higher than location B, thus leading to higher fixed costs than what she would have with location B. However, if she makes more than 20,000 units, both locations will likely have to be expanded, both the physical buildings and the manufacturing equipment. Variable costs to produce each unit will vary by location as well as by product. For example, the first design will have variable costs of $10 and $15 in locations A and B respectively, while the second bird feeder design will have variable costs of $20 and $25 respectively depending on location. However, she thinks that variable costs will decrease if she sells more than 5,000 units, as she will receive discounts from her suppliers at that point. She is unsure of…
Even though independent gasoline stations have been having a difficult time. Murad has been thinking
about starting her own independent gasoline station.
Murad's problem is to decide how large his station would be. The annual returns will depend on both
the size of his station and a number of marketing factors related to the oil industry and demand for
gasoline.
After a careful analysis, Murad developed the following table:
Size of the first station
Small
Medium
Large
Very large
Probability
Good market,$
50 000
80 000
100 000
300 000
20%
Fair market,$
20 000
30 000
30 000
25 000
30%
a) what is the maximax decision?
b) what is the maximin decision
c) what is the equally likely decision (Laplace)
d) What is the Expected Monetary Value Criterion (EMV Criterion)
Poor market, $
-10 000
-20 000
-40 000
-160 000
50%
A local real estate investor in Kingston is considering three alternative investments: a motel, a restaurant, or a theater. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the theater will be relatively stable under any conditions. The following payoff table shows the profit or loss that could result from each investment:
Real Estate Investor Payoff Table
Payoffs are Profits
States of Nature (Gasoline Availability)
Decision Alternatives
Shortage
Stable Supply
Surplus
Motel
$–8,000
$15,000
$22,000
Restaurant
$2,000
$8,000
$6,000
Theater
$6,000
$6,000
$5,000
Which option should the real estate investor choose if he uses the LaPlace criterion?
Using…
Chapter 4 Solutions
Spreadsheet Modeling and Decision Analysis: A Practical Introduction to Business Analytics
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, management and related others by exploring similar questions and additional content below.Similar questions
- Two vaccination schemes are recently adopted in Lebanon, Pfizer and Astrazenica. The profit for each one of these is dependent on the site (clinic or hospital) performing the vaccination process. This is shown in the following payoff table. Ministry of health considering the maximum profit to be able to cover the cost of staff where vaccination process can either be in a small clinics, or medium size hospitals or in main hospitals Assume the payoffs represent profits. Determine the alternative that would be chosen under each of these decision criteria: Maximin, Maximax, Laplace. In your own opinion, which alternative likely to be excluded and why? The ministry of health would like to check the possible loss. Find out the minimax regret table and identify the recommended alternative. Assuming the probability of getting Pfizer is 0.6 and getting Astrazenica is 40%, determine the expected value of perfect information using the regret table. Compute the EVPI again…arrow_forwardA national truck rental services has a surplus of one truck in each of the cities, 1, 2, 3, 4, 5, and 6 and a deficit of one truck in each of the cities 7,8,9,10,11 and 12.The distance (in kilometers) between the cities with a surplus and cities with deficit are displayed below:a) b) How should the trucks be displayed so as to maximize the total distance travelled? 1 2 3 4 5 6 7 41 72 39 52 25 51 8 22 29 49 65 81 50 9 27 39 60 51 32 32 10 45 50 48 52 37 43 11 82 40 40 60 51 30arrow_forwardOhio Swiss Milk Products manufactures and distributes ice cream in Ohio, Kentucky, and West Virginia. The company wants to expand operations by locating another plant in northern Ohio. The size of the new plant will be a function of the expected demand for ice cream within the area served by the plant. A market survey is currently under way to determine that demand. Ohio Swiss wants to estimate the relationship between the manufacturing cost per gallon and the number of gallons sold in a year to determine the demand for ice cream and, thus, the size of the new plant. The following data have been collected: Plant ITT Thousands of Gallons Sold (X) 434.7 Cost per Thousand Gallons (Y) 1 $1,024 2 962 466.4 3 1,065 1,006 1,045 1,068 251.3 372.1 5 245.0 6. 258.6 7 988 614.9 414.0 8 997 9 1,063 1,000 $10,218 267.5 380,4 3,704.9 10 Total a. Develop a regression equation to forecast the cost per thousand gallons as a function of the number of thousands of gallons produced. The forecasting model…arrow_forward
- Ohio Swiss Milk Products manufactures and distributes ice cream in Ohio, Kentucky, and West Virginia. The company wants to expand operations by locating another plant in northern Ohio. The size of the new plant will be a function of the expected demand for ice cream within the area served by the plant. A market survey is currently under way to determine that demand. Ohio Swiss wants to estimate the relationship between the manufacturing cost per gallon and the number of gallons sold in a year to determine the demand for ice cream and, thus, the size of the new plant. The following data have been collected: ITT Cost per Thousand Gallons (Y) $1,024 Thousands of Gallons Sold (X) 434.7 Plant 962 466.4 251.3 372. 1,065 1,006 1.045 245.0 258.6 1,068 988 997 1,063 1,000 $10.218 614.9 414.0 267.5 380,4 3 704 9 9 10 Total a. Develop a regression equation to forecast the cost per thousand gallons as a function of the number of thousands of gallons produced. The forecasting model is given by the…arrow_forwardOhio Swiss Milk Products manufactures and distributes ice cream in Ohio, Kentucky, and West Virginia. The company wants to expand operations by locating another plant in northern Ohio. The size of the new plant will be a function of the expected demand for ice cream within the area served by the plant. A market survey is currently under way to determine that demand. Ohio Swiss wants to estimate the relationship between the manufacturing cost per gallon and the number of gallons sold in a year to determine the demand for ice cream and, thus, the size of the new plant. The following data have been collected: ITT Plant 1 Cost per Thousand Gallons (Y) $1,024 Thousands of Gallons Sold (X) 434.7 2 962 466.4 3 1,065 1,006 1,045 1,068 251.3 372.1 5 245.0 258.6 614.9 7 988 8. 997 414.0 267.5 380.4 3,704.9 9 1,063 1,000 $10,218 10 Total a. Develop a regression equation to forecast the cost per thousand gallons as a function of the number of thousands of gallons produced. The forecasting model is…arrow_forwardTommy Hilfiger is currently considering to source certain textile goods, Tommy Jeans, from Mexico. The estimated shipping time from Mexico to the U.S. for each shipment of Tommy Jeans is 4 days and the estimated freight cost of each shipment is $800. On the other hand, the current average shipping time from Vietnam to the U.S. for each shipment of Tommy Jeans is 23 days and the average freight cost is $2300. Even though the shipping time and freight cost seem to be much lower in case of Mexico, Tommy Hilfiger management is concerned about the production cost of each Jeans shipment. The management anticipates that the production cost of each Jeans shipment will be higher in Mexico compared to Vietnam. However, Tommy Hilfiger management has decided that even if the total cost (sum of production cost, freight cost, and holding cost) remain similar to Vietnam, Tommy Hilfiger will still source Jeans from Mexico because of the reduced shipping time, which, in turn, will result in better…arrow_forward
- 1.arrow_forwardKOOKABOORA CONTAINER CORPORATION (From Business Organization and Management – Dr. Roberto Medina) When the Clark Special Economic Zone in Pampanga opened its gates for investors in light and medium industries, the Kookaboora Container Corporation (KCC) was among the first ten companies to locate in the zones’s premises. KCC manufactures containers of various shapes and sizes which are used by manufacturers of industrial chemicals, food products, cooking oil, motor oil and others. The production department of KCC is headed by Engr. Nicolas, a licensed mechanical engineer. He is a tickler for discipline. When even small mistakes happen in his department, he personally calls the offending employee and metes appropriate penalty. As a result, his department was judged best in efficiency. Very minimal wastage in materials and time were recorded by the department. Under the direct supervision of Engr. Nicolas are 10 supervisors who are graduates of engineering courses and…arrow_forward4. Companies A, B, and C supply components to three plants (F, G, and H) via two crossdocking facilities (D and E). It costs $4 to ship from D regardless of final destination and $3 to ship to E regardless of supplier. Shipping to D from A, B, and C costs $3, $4, and $5, respectively, and shipping from E to F, G, and H costs $10, $9, and $8, respectively. Suppliers A, B, and C can provide 200, 300 and 500 units respectively and plants F, G, and H need 350, 450, and 200 units respectively. Crossdock facilities D and E can handle 600 and 700 units, respectively. Logistics Manager, Aretha Franklin, had previously used "Chain of Fools" as her supply chain consulting company, but now turns to you for some solid advice. Set up the solution in Excel and solve with Solver. What are total costs?arrow_forward
- Canning Transport is to move goods from three factories to three distribution centers. Information about the move is given below. Supply 200 Source Destination Demand 50 A 125 125 в 100 Y 150 Shipping costs are: Source 3 9 Destination Y 2 A в 10 6. (Source B cannot ship to destination Z) A. According to the Northwest Corner method, the initial solution would have a total transportation cost of B. According to the Vogel's Approximation Method, the initial solution would have a total transportation cost of C. According to the minimum cell cost method, the initial solution would have a total transportation cost of D. According to the Northwest Corner method, the initial solution would give to cell CIII a loading of E. According to the Vogel's Approximation Method, the initial solution would give to cell Cll a loading of F. According to the minimum cell cost method, the initial solution would give to cell BI a loading ofarrow_forwardThe following table shows the payoff matrix that represents the strategic interaction between two friends, Amanda and Barbara. They are deciding which island in the Outer Hebrides of Scotland to visit on their holiday. Amanda Barral South Uist Select all the correct answers. Barra 6,3 4,4 Barbara South Uist 2,2 3,6 There are two Nash equilibria In a one-shot, simultaneous game, both Amanda and Barbara will choose to visit Barra since their total happiness would be the highest In a sequential game where Barbara can move first, Amanda would choose to visit South Uist Amanda likes Barra more than South Uist, conditional on both choosing the same islandarrow_forwardConsider the transporatio table below: (a) Use the Northwest-Corner Method, the Least-Cost Method and the VAM to get the starting feasible solution. (b) Find the optimal solution by considering the smalles value of the oibjective function computed in (a).arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,