ass05_due092810_310_sol

ass05_due092810_310_sol - $140,063 110000 $121,000 $22,688...

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No. 2 Now=year1 Year 2 Discount rate 20% Amount Prob Expected Amount Prob Expected Spending 150 0.75 112.5 150 0.5 56.25 135 0.5 50.63 -10% 135 0.25 33.75 135 0.5 16.9 Total 146.25 121.5 0.5 15.2 Total 138.94 Parts4U.com 5% 153.56 145.88 Present value $275.13 MRO 1% 147.71 140.33 Base 10 Present value 274.65 Buy from MRO, but would really depend on other factors
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High volume cutoff 90000 Spot Prices $2 $4 Last year's demand 100000 Current year probability of demand 75% Second year probability of demand 75% % change up next year 20% % change up this year 10% Discount rate 20% Multi price $1.20 Mix price $0.90 Current year cost with Multi $129,000 Second year with Multi $89,100.00 $29,700 $27,000 $9,000 $154,800 PV of second year $129,000 Total PV $258,000 Current year with Mix Demand Cost Expected 110000 $161,000 $120,750 100000 $101,000 $25,250 Total curent year $146,000 Next year with Mix 132000 $249,000
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Unformatted text preview: $140,063 110000 $121,000 $22,688 120000 $201,000 $37,688 100000 $101,000 $6,313 Total next year $206,750 PV next year $172,292 Total PV $318,292 Difference in favor of Multi $60,292 No. 6 Discount rate 10% Italy/China ratio 1:0.7 0.7 Year 0 Year 1 Year 2 Prob Cost Prob Cost Italy cost/unit 10 1 10 1 10 China 7 China increase 15% 0.5 4.03 0.5 2.314 0.5 1.912 China decrease-5% 0.5 3.33 0.5 1.912 Total 7.35 0.5 1.579 7.718 No transfer Shipment Cost Shipment Cost Shipment Cost Italy 0.9 9 0.9 9 0.9 9 China 1 7 1 7.35 1 7.72 Total 16 16.35 16.72 Present value 44.68 With transfer Shipment Cost Shipment Cost Shipment Cost Italy 0.4 4 0.4 4 0.4 4 China 1.5 12.5 1.5 11.03 1.5 11.58 Total 16.5 15.03 15.58 Present value 43.03 Move the capacity to China...
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ass05_due092810_310_sol - $140,063 110000 $121,000 $22,688...

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