Please show the work you used to come to the answers. Thank you! MUST SHOW ALL W
ID: 347598 • Letter: P
Question
Please show the work you used to come to the answers. Thank you!
MUST SHOW ALL WORK TO RECEIVE CREDIT. IF CALCULATIONS ARE NOT SHOWN, YOU WILL NOT RECEIVE POINTS YOU ARE NOT PERMITTED TO CROSS OUT ANSWERS (please use white out if making corrections). 10 points total The product manager of a juice manufacturer is debating whether to utilize Flavor A, B or C to produce a new line of healthy caffeinated juices. Revenues will depend on demand for flavors and is shown below Moderate uice Flavor A $ Flavor B Flavor C Low 00,000700,000700,000 $ 1,000,000 $ 500,000 600,000800,000 1,200,000 500,000 1. If manager used MAXIMIN to select an alternative, which would she choose? (1 pt) RECIPE AMOUNT 2. If manager used MAXIMAX to select an alternative, which would she choose? (1 pt) RECIPE AMOUNT 3. If manager used LAPLACE to select an alternative, which would she choose? (1 pt) RECIPE AMOUNT 4. The manager expects the likelihoods of Low Demand to be 50% and Moderate Demand to be 40%. Given this information, what are the EMVs for each alternative? Which alternative would she choose in light of these likelihoods? (4 pts) ENMV A= SELECT EMV B= EMV C = 5. The manager has an opportunity to conduct research to determine more accurately what demand will be. Time to complete the research is minimal/acceptable and would cost $200,000. Should the company conduct the research? (Circle below). Show ALL applicable math (as shown in class) to support and provide rationale in ONE, SINGLE, SHORT statement. (3 pts) Yes No Math One Statement RationaleExplanation / Answer
Juice Low Mod High Flavor A 700000 700000 700000 Flavor B 600000 800000 1000000 Flavor C 1200000 500000 500000 1 MaxiMIN Juice Low Mod High Step 1 Min of each Alternative Max of Step 1 Recipe Amount Flavor A 700000 700000 700000 700000 700000 Flavor A 700000 Flavor B 600000 800000 1000000 600000 Flavor C 1200000 500000 500000 500000 2 MaxiMax Juice Low Mod High Step 1 Max of each Alternative Max of Step 1 Recipe Amount Flavor A 700000 700000 700000 700000 Flavor C 1200000 Flavor B 600000 800000 1000000 1000000 Flavor C 1200000 500000 500000 1200000 1200000 3 Laplace Juice Low Mod High Step 1 :Average of situations Max of Step 1 Recipe Amount Flavor A 700000 700000 700000 700000 Flavor B 800000 Flavor B 600000 800000 1000000 800000 800000 Flavor C 1200000 500000 500000 733333.3333 4 Prob 0.5 0.4 0.1 Laplace Juice Low Mod High EV (Prob*Outcome) Flavor A 700000 700000 700000 700000 EMV A Flavor B 600000 800000 1000000 720000 EMV B Flavor C 1200000 500000 500000 850000 EMV C 5 Prob 0.5 0.4 0.1 Best option Juice Low Mod High Flavor A 700000 700000 700000 Flavor B 600000 800000 1000000 Flavor C 1200000 500000 500000 C B B EV (Prob*Outcome) 1200000 800000 1000000 1020000 Difference Best option(EVWPI) - EMV C (EVwoPI) 170000 No As the EVPI is 170000 but the cost for it is 200000, it’s a loss making proposition