Practical Management Science
5th Edition
ISBN: 9781305250901
Author: Wayne L. Winston, S. Christian Albright
Publisher: Cengage Learning
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Question
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
a)
Expert Solution
Explanation of Solution
Formulae to determine the above table:
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
Explanation of Solution
Formulae to determine the above table:
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:
Press ok and the below image (Model image) will appear:
Click in the triangle:
Select decision (The below image is model):
Click ok and the below image (Model image) will appear:
Click in the triangle:
Select chance (The below image is model):
The process should be continued till end.
The following image shows the complete decision tree:
According to decision tree, it is better to wait and purchase the sugar in six months.
Strategy B4:
Strategy B5:
Strategy B6:
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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Students have asked these similar questions
Suppose that a firm has the option to make or buy a part. Its annual requirement is 11,000 units. A supplier is able to supply the part at $6 per unit. The firm estimates that it costs $800 to prepare the contract with the supplier. To make the part, the firm must invest $29,000 in equipment, and the firm estimates that it costs $3 per unit to make the part.
COSTS
MAKE OPTION
BUY OPTION
Fixed Cost
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Variable Cost
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Chapter 9 Solutions
Practical Management Science
Ch. 9.2 - Prob. 1PCh. 9.2 - Prob. 2PCh. 9.2 - Prob. 3PCh. 9.3 - Prob. 4PCh. 9.3 - Prob. 5PCh. 9.3 - Prob. 6PCh. 9.3 - Prob. 7PCh. 9.4 - Explain in some detail how the PrecisionTree...Ch. 9.4 - Prob. 9PCh. 9.4 - Prob. 10P
Ch. 9.5 - Prob. 11PCh. 9.5 - Prob. 12PCh. 9.5 - Prob. 13PCh. 9.5 - Prob. 17PCh. 9.5 - Prob. 18PCh. 9.5 - Prob. 19PCh. 9.5 - Prob. 21PCh. 9.5 - The model in Example 9.3 has only two market...Ch. 9.6 - Prob. 26PCh. 9.6 - Prob. 27PCh. 9.6 - Prob. 28PCh. 9 - Prob. 30PCh. 9 - Prob. 31PCh. 9 - Prob. 32PCh. 9 - Prob. 34PCh. 9 - Prob. 36PCh. 9 - Prob. 37PCh. 9 - Prob. 38PCh. 9 - Prob. 39PCh. 9 - Prob. 46PCh. 9 - Prob. 48PCh. 9 - Prob. 53PCh. 9 - Prob. 67PCh. 9 - Prob. 68PCh. 9 - Prob. 69PCh. 9 - Prob. 70PCh. 9 - Prob. 71PCh. 9 - Prob. 72PCh. 9 - Prob. 73PCh. 9 - Prob. 74PCh. 9 - Prob. 75PCh. 9 - Prob. 76PCh. 9 - Prob. 77P
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