EBK PRACTICAL MANAGEMENT SCIENCE
EBK PRACTICAL MANAGEMENT SCIENCE
5th Edition
ISBN: 9780100655065
Author: ALBRIGHT
Publisher: YUZU
Question
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Chapter 9, Problem 30P

a)

Summary Introduction

To identify: The decision that would minimize the expected cost using precision tree.

Introduction: Simulation model is the digital prototype of the physical model that helps to forecast the performance of the system or model in the real world.

a)

Expert Solution
Check Mark

Explanation of Solution

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  1

Formulae to determine the above table:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  2

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  3

b)

Summary Introduction

To determine: The input that have the largest effect on the best.

Introduction: Simulation model is the digital prototype of the physical model that helps to forecast the performance of the system or model in the real world.

b)

Expert Solution
Check Mark

Explanation of Solution

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  4

Formulae to determine the above table:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  5

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  6

Decision tree developed by precision tree software:

Decision tree should be developed using precision tree software.

Place the cursor at any blank cell and click decision tree under precision tree icon. The following window will appear:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  7

Press ok and the below image (Model image) will appear:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  8

Click in the triangle:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  9

Select decision (The below image is model):

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  10

Click ok and the below image (Model image) will appear:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  11

Click in the triangle:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  12

Select chance (The below image is model):

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  13

The process should be continued till end.

The following image shows the complete decision tree:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  14

According to decision tree, it is better to wait and purchase the sugar in six months.

Strategy B4:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  15

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  16

Strategy B5:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  17

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  18

Strategy B6:

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  19

EBK PRACTICAL MANAGEMENT SCIENCE, Chapter 9, Problem 30P , additional homework tip  20

The sensitivity analysis was done for the cells B4, B5, and B6. It is optimal to purchase a 10-ton futures contract.

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