{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

UNIT 9_FINAL_PROJECT_QUANTATIVE METHOD CHECK AND EDIT PLEASE

UNIT 9_FINAL_PROJECT_QUANTATIVE METHOD CHECK AND EDIT...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
MMO305 Final Project Problems 1. Modern Electronics specializes in manufacturing modern electronic components. It also builds the equipment that produces the components. Modern Electronics is considering building a new facility but the estimated profits would be impacted by the type of market that develops. The probability for a strong market is 0.3; for a fair market is 0.5; and for a poor market is 0.2. You are responsible for advising the president of Modern Electronics on the type facility that should be built or to not build a facility at all. The table shows the estimated profits under each market and for each size facility. Estimated Profits Strong Market Fair Market Poor Market Build a large facility 550,000 110,000 -310,000 Build a medium-size facility 300,000 129,000 -100,000 Build a small facility 200,000 100,000 -32,000 Do not build a facility 0 0 0 Using the information in the table above develop a recommendation for your president. Be sure to explain why you are making the recommendation and you must include a recommendation that maximizes profits and a recommendation that minimizes loss. 1.1. Appropriate Technique Decision Analysis is the best technique for making recommendation to the President of Modern Electronics. Most popular method is to choose the alternative with the highest 1 EMV (alternative  i ) =  (payoff of first state of nature) x (probability of first state of nature) +  (payoff of second state of nature) x (probability of second state of  nature) +  … +  (payoff of last state of nature) x (probability of last state of nature)
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
MMO305 Final Project Problems expected monetary value (EMV). Since the decision making environment is risk based it is appropriate to use EMV.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern