{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# HW7 - Brittany Braud Management 368 Homework 7 Chapter 9 6...

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

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Brittany Braud Management 368 Homework 7 June 20, 2011 . Chapter 9 - # 6: The design and effective capacities for a local emergency facility are 300 and 260 patients per day, respectively. Currently, the emergency room processes 250 patients per day. What can you conclude from these ﬁgures? . - ~ - (mam e 0d) Dunk M = 160‘ ~ch,\ \n mm — 7300 V 9 W“) V M, 9M9 / ESQ-RCng m D VW'J‘S ' q z MM 0 “i mirth: 15.9 (WM 1190 \Mnmsmgmm Ema-w; mam cg . , 5160mm} v- . :M MID xx- \)’<\\\’lf\ikm been h Aéggw Womb/3U 439° . .Iv mam mm 2. Chapter 9 - # 10 RWWUYV’ ‘1 Spectrum Hair Salon is considering expanding its business, as it is experiencing a large growth. The question is whether it should expand with a bigger facility than needed, hoping that demand will catch up, or with a small facility, knowing that it will need to reconsider expanding in three years. The management at Spectrum has estimated the following chances for demand: a The likelihood of demand being high is 0.7 0. I The likelihood of demand being low is 0.3 0. Estimated proﬁts for each alternative are as follows: 0 Large expansion has an estimated proﬁtability of either \$100,000 or \$70,000, depending on whether demand turns out to be high or low. a Small expansion has a proﬁtability of \$50,000, assuming that demand is low. 0 Small expansion with an occurrence of high demand would require considering whether to expand further. if the business expands at this point, the proﬁtability is expected to be \$90,000. If it does not expand further, the proﬁtability is expected to be \$60,000. Draw a decision tree and solve the problem. What should Spectrum do? Awgn MMMEE (one) 4% \DO )00 0 i10\$ﬁD Wham ’6de “WWW it”. 3. Magnatree is a large company that has been working on a new product. This product has tremendous potential. but Magnatree must move quickly. They have decided that they will introduce the product in two months and have already started developing their advertising campaign. They are sure that the product will be a success, with a possibility that it will be a huge success. They recently found out that another company, Shadycorp, has some unique expertise that could signiﬁcantly improve the new product. They contacted them and Shadycorp offered to sell their expertise to Magnatree for \$5 million. Magnatree needs to make an immediate decision on Shadycorp's offer or it will be too late to investigate the use of the expertise in design of the new product. Without the expertise Magnatree has a 20% chance of making the new product a huge success. With Shadycorp’s expertise there will be a 40% chance of the new product being a huge success. If the new product is a huge success, the net present value of its future proﬁts is expected to be \$50 million. If it is merely a success, the net present value of its future proﬁts is expected to be \$20 million. 1] Construct a decision tree and solve it. 2] Should Magnatree accept Shadycorp’s offer? 3) What is the expected net present value of its future proﬁts from the new product? 5; «653033300 ...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• 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.

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

• 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.

Dana University of Pennsylvania ‘17, Course Hero Intern

• 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.

Jill Tulane University ‘16, Course Hero Intern