Chapter 1
3 types of business ownership
- Sole proprietorship
- Partnership
o General
o Limited
- Corporation
Advantages
Sole Proprietorship
- Easiest to start
- Least regulated
- Single owner keeps
all profits
- Taxed once as
personal income
Partnership
BUSI 2504 Lecture 2
Continue of Chapter 5: Time Value of Money
Declining Sales: Example
FV
= PV (1 + r)t
= 2,000 (1 + (-0.1)4
= 2,000 (0.9)4
= 1,312 cars
2,000 1,312 = 688 cars less
Present Value: Example
Bob has a vintage typewriter that he would like to
2. a.
y = 0.5x + 16.857
25
20
15
Sales
Linear (Sales)
10
5
0
Feb
b.
Mar
Apr
May
Jun
Jul
Aug
(1) Instead of manually calculating a and b, we will use Excels Add Trendline
function in the Chart Menu: Y = .5x + 16.857 (where x = index of month; x = 1
for Feb
3.
Desired output = 4 units per hour
Operating time = 56 minutes per hour
CT =
[4]
Operating time
Desired output
56 minutes per hr.
4 units per hr.
=
3
[3]
[3]
2
a
b
[3]
= 14 minutes per unit
4
c
7
[2]
4
[1]
9
d
e
h
[3]
[4]
5
6
f
g
[No. of followers]
time
2.
OT = 1.2 minutes
PR = .95
A = 10% of work day
1
1
AFday =
=
= 1.11
1A
1 0.1
a. OT = 1.2 minutes
b. NT = OT x PR = 1.2 x .95 = 1.14 minutes
c. ST = NT x AFday = 1.14 x 1.11 = 1.27 minutes
3.
AFday = 1 / (1 - .15) = 1.18
PROBLEM NO. 7 - 3
Afday=
1.18
OBS
1.
a.
i. Utilizatio n =
Actual output
7
=
= 70%
Design capacity 10
Efficiency =
Actual output
7
= = 87.5%
Effective capacity 8
ii. Utilizatio n =
Actual output
4
= = 66.7%
Design capacity 6
Efficiency =
Actual output
4
= = 80%
Effective capacity 5
b. This
12/14/2008
CHAPTER 1:
Introduction
to
Operations
Management
What Is Operations Management?
Operations management is the
management of processes or systems
that create goods and/or provide
services.
Slides prepared by
Romulus Cismaru
University of Regina
1
A company is considering buying a cell phone and phone service plan. There are three service plan s
available, all of which have a monthly charge of $20. The additional costs for the plans are shown in the
following table:
Plan
Costs for day time calls (p
CHAPTER 5
SUPPLEMENT:
Decision
Analysis
Slides prepared by
Romulus Cismaru
University of Regina
Introduction
Decision Theory Elements
A set of possible future conditions
exists that will have a bearing on the
results of the decision
A list of alternati
ExampletoDoForNextClass:
Returnfromstockinvestment
Cow Corp. is forecast to pay a $4 dividend every quarter
over the next year. You just bought 100 shares for $100
per share. If you can sell for $102.85 per share one year
from now, right after receiving y
Chapter13
Risk & Return
1
LearningObjectives
Calculate expected returns and variance of
returns for individual securities and for
portfolios of securities
List the effects of diversification
Define correlation
Define systematic risk
Calculate required ret
Chapter6
Discounted Cash Flow Valuation
1
LearningObjectives
Value annuities and perpetuities
Compute loan payments
Find the interest rate on a loan
Describe how loans are amortized (paid off)
Convert between quoted and effective
interest rates
2
Examplet
MortgageExample1
You have just applied for a $120,000 mortgage. The
quoted rate is 6% and you have chosen to amortize
over 15 years. What will be your monthly payment?
Your
banker suggests that you amortize over 30
years. What would be your monthly paymen
Chapter5
Time Value of Money
1
LearningObjectives
Compute the return on an investment
Compute the number of periods that equates
a present value and a future value given an
interest rate
Compute FV or PV of multiple cash flows
2
LumpSumPVFormula:Example
Y
Q9fromtextbook
A project that provides annual cash flows of
$14,000 for nine years costs $70,000.
Is this a good project if the required return is 8%?
At which required return would we be indifferent
between accepting or rejecting the project?
Chapter12
C
Lecture 3
Week 2
Chapter 2
Describing shape of a
distribution
Stem-and-leaf: main unit is stem, so that
there will be 5 to 20 stems. Subsequent
unit is leaf.
Example 1: GPA data.
Histogram (or frequency histogram): data
divided into classes, the bars heig
Lecture 10
Ch. 4 Section 4.3-4.5
Examples of binomial
experiment
Number of girls in a family of 4 children
Number of international students in a
sample of 10 students.
Number of laser jet printers in 40 printers
used in Math department.
Number of Mostly s
Lecture 14
Ch. 6. Sampling
distributions
Sampling distribution for sample
mean
Example1
Example 2: Fuel efficiency
A midsize car model maker claims that its
mean fuel economy (MFE) is less than
7.6L/100km (and therefore entitled to a tax
credit). Lets che
Lecture 13
The exponential
distribution
Relation to Poisson distribution
Formulas
Another example
Patients arrive at a hospital emergency
room according to a Poisson distribution.
Records show that on average, 7 minutes
elapse between two successive arriv
Lecture 8
Ch. 3 (Cont)
Multiplicative rule
An other example
Example 2: A dryer and a washer
independently work properly with
probability .95 and .85 (respectively).
What is the probability that (a) both
machines work properly? (b) none of them
works prope
Lecture 2
Week 2
Finish Chapter 1
Brief Intro to Survey methods
Survey is a questionnaire: specific variable
Examples: Likart scale for job satisfaction,
or StatCan surveys.
Purpose of a survey: get responses from
participants.
Four Steps: 1 decide upon c
Lecture 12. Ch. 5 (Cont)
More examples on
normal distribution
One more example on normal
distribution: Stocking energy
Weekly demand at rink for a brand of
d a store
energy drink is approximately normally
distributed with mean of 1,000 cans, and
standard
Lecture 4
Ch 2 (Continued)
How to interpret standard
deviation
q
Small std little variability between data
Big std large variability (spread)
between data.
Example: Compute std for and compare
hourly wages and revenue data (see
minitab)
The normal curve (
Lecture 9
Ch. 4 Discrete random
variables
Examples
A discrete random variable (RV) is a count
variable. For example:
Number (out of 10 injured ) who will need
to stay in a local Ottawa general hospital.
Rating on 1-5 scale of a prof by a student.
Number o