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Unformatted text preview: COMMERCE 290 HOMEWORK #6
Due: Friday, November 21, 2008 before 12:00 noon Completed homework must be handed into the Commerce 290 Homework Mailboxes located on the third floor of the Henry Angus Building. These Mailboxes
are located across the hall from HA 308. Note: As you know from the course outline, some homework assignments are
completed individually and others are completed in groups. This homework is to be '
completed by individual students only. Students are reminded not to work in
groups, not to discuss your homework with others and this includes using the Course
Discussion Forum as a means of communication for this homework. This is NOT a
group work homework. ' DIRECTIONS: ‘ 1. For Questions #1, write all your answers in the indicated
' spaces and show all work on this paper. No additional
pages will be accepted. For QUestion #2, staple your work to
the end of this homework. 2. Show all work on this homework paper. No credit for
answers only! 3. Be sure to include your units in each answer. Last Name: _ First Name; 647LUT'10 N  ' Student Number: ' Signature: Excel Lab Number: Question 1 (40 marks) Do the OMB Textbook Problem 4.25 (German Manufacturing, Chapter 4). Answer the
 questions from the textbook in the Spaces provided below. (a) (8 marks) Use a decision tree to recommend a decision. Gem‘sla carter/(rhea 3' ('3ng DEC: PDRcHﬂf’E s 9‘ _ . _
(4 marks) Use EVPI to determine whether Gorman should attempt to obtain a better estimate of demand. EMVCmX: (b) M (9203 W 4'0
\__P' Lrs’
M lao EPPI: ,35‘(ia) + Aha—(14;) +,30(ra¢) = Lléi.’2f75@ yer/gay }® '3th : ‘l EP?II  Emvl : l Lia/.275" 40.25l Since EVPl is large ($9,000) relative to EMV ($40,250)
it would be worthwhile to improve the estimates. ' . ) maﬁkb«i7
a 2
( 0 . Twéé 9+vv¢+d"‘@
Ll 0' l3, 0'
(00 I Pa!” Cg , Paa‘nbﬁleb}: l0 _ , '
Li 5'
70 (c) (8 marks) Using the information provided in the textbook, What is the probability that tho
market research report will be favourable? (ﬂu/“44$ 1
city—M mm :4 PC PCUM1:"(’ pLult—t]: "1" Pcm]: .35, ' PCH33'30 .* S+uei¢vrb my? guru/e
a'l'vi’ﬁoavtswew m a number we wrrzotwuaf} ,. FEM [U]; I'll/'[plfjZ ,329 ‘1‘? 36+Sma'l‘5 wwsf _ ‘ p p3 4 .355" W sbww waruk. ' 9(1)) .2 .fa‘hf (d) Mew 40 (66> ,
DEC; (Dc/«Am W: {Vt£0} 3.52%" OPTIMAL STRATEGY If Report does NOT cost mere than $3,648 (43.898— 40.25) ©
Choose Report:
1 (D If Report Favourable, Choose M ( Manufacture)
If Report Unfavourable, Choose P ( Purchase) LD
EMV of this Strategy: $43,898 £
¥, 63,4 v56, mayhem; ML _ ‘
' dear/mad . , TVdé s+vv¢'{v’£/ 5" , Praiazbhlt‘ﬁﬂie 3' I P 37:: KC; 2 ( l mamék pw
1—. . wtva 1M arr—[m mic/e; Cw: w. 43} 2L 3
2+0 3 9) (e) (f) (2 marks) What is the expected value of the market research information? j. I " l ; l q3;949  wgﬂivi 1 Ma» (L5
: #3,??? j
._1 Car {D/ﬂ‘” “’Vq‘l‘ﬂé  1. 1C wmtﬂé‘cl47 “yr/‘77
./ ,c #2 ma m {ncgrrdd'i' ka A
atwﬂs’fz’rr "" a"! (5‘) Ea (2 marks) What'js the efficiency of this information? Evsr ~—' Clo: o 2
CC 0'1 x EVPI 9
[WA ; 36443
qaaa 4ﬁ.53 % II‘ .. 140" (140471!“ 1 4;ng
m Mama1L 9:215 we as {caf Page 5 of 6 Question 2 (20 marks) Do the OMB Textbook Problem 4 (Amy Lloyd Problem, Chapter 4). Answer questions
a), b),o),d) from the textbook. Set up this problem in Excel and organize your work so
that it is logical, well organized and easy to understand. Attach a one page printout of
your work to this homework. _  'Page6of6» Question #2
QMB Question 4.4 (a) The decision is to choose which dealer to lease from I } 1 mark The chance event is how many miles she will drive in 1 year ( or 3 year total) } 1 mark
(h) (c) input data Forno
Midtown Hopkins 0 marks months Lease Period
Payoff matrix Cost
Miles EMV Conservative Optimistic Regret Forno 13464 11574
Midtown 12960 1 1 160
Hopkins 11700 _ 11700 Best decisions using: Making KW * 1 mark for each of the 9 entri“ in t e cost
matrix(Total 9 marks) *1 mark for all 3 numbers in cons rv tive column
(Total 1 mark) * 1 mark for all 3 numbers in Optimistic column (Total
1 mark) ‘ * 1 mark each (Total 3 marks) for identifying the best
decisions either using a sentence ( to the left) or
highlighting with shading in the matrix Conservative: Hopkins
Optimistic: Forno
Regret: Regret Regret Matrix Miles 45000 54000 1 mark(Total) for Fomo 954 1764 correct entries in Regret
Midtown 396 0 1260 . matrix
Hopkins 936 540 0 1 mark(Total) feral! 3
numbers in the Regret
column
(d) Best Decision using EMV: Midtown 1 mark for identifying best decision '
' (See EMV work in part c) (d) above ) } Marking Key for part (d)
*1 mark for all 3 numbers in the EMV column (in part (bic) ...
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 Winter '09
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