Chapter 6, Problem 17QP

Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: DemandStaffing Options High Medium LowOwn staff           650   650         600Outside vendor 900    600        300Combination     800   650         500(a) If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? Outside vendorWhat is the expected annual cost associated with that recommendation? Enter your answer in thousands dollars. For example, an answer of $200 thousands should be entered as 200,000. Expected annual cost = $570000(b) Construct a risk profile for the optimal decision in part (a). The input in the box below will…

Cox Electric makes electronic components and has estimated the following for a new design of one of its products. Fixed cost = $14,025 Material cost per unit = $0.17 Labor cost per unit = $0.12 Revenue per unit = $0.62 produces, profit is calculated by subtracting the fixed cost and total variable cost from total revenue. Construct an appropriate spreadsheet model to find the profit based on a given production level and use the spreadsheet model to answer these questions. does breakeven occur? Enter a number. your model. units Cox Electric makes electronic components and has estimated the following for a new design of one of its products. . Fixed cost = $14,025 Material cost per unit = $0.17 • Labor cost per unit = $0.12. • Revenue per unit = $0.62 Note that fixed cost is incurred regardless of the amount produced. Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells a produces, profit is calculated by subtracting the fixed cost…

Georgia Cabinets manufactures kitchen cabinets that are sold to local dealers throughout the Southeast. Because of a large backlog of orders for oak and cherry cabinets, the company decided to contract with three smaller cabinetmakers to do the final finishing operation. For the three cabinetmakers, the number of hours required to complete all the oak cabinets, the number of hours required to complete all the cherry cabinets, the number of hours available for the final finishing operation, and the cost per hour to perform the work are shown here:     Cabinetmaker 1 Cabinetmaker 2 Cabinetmaker 3 Hours required to complete all the oak cabinets 50 44 32 Hours required to complete all the cherry cabinets 61 46 34 Hours available 35 25 30 Cost per hour $36 $43 $56   For example, Cabinetmaker 1 estimates that it will take 50 hours to complete all the oak cabinets and 61 hours to complete all the cherry cabinets. However, Cabinetmaker 1 only has 35 hours available for the final…