Demonstrate how decision trees can be used in order to choose the design option based on the above situation. Calculate the expected monetary value (EMV) of each option and determine which option you will propose.
Q: A power plant is planning to acquire a new Diesel generating set to replace its resent unit which…
A: This question is related to the topic -Make or buy analysis (Decision Making) and this topic falls…
Q: A manufacturing plant has reached full capacity. The company must build a second plant—either small…
A: a. The rectangular nodes represent the decision nodes and the circular ones are chance nodes.
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: The expected return is indeed the profit or loss that an investor may expect from a given…
Q: A power plant is planning to acquire a new Diesel generating set to replace its resent unit which…
A: This question is related to the topic -decision making and this question fall under the operations…
Q: A manager is trying to decide whether to build a small, medium or large facility. Demand can be low,…
A: According to the given information- Alternatives Low Demand Average Demand Hit Demand Small…
Q: A motor is required to drive a pump to remove water from a tunnel. The unit will be needed for a…
A: The arrangement has been summed up in 5 pictures beneath. Allude the equivalent for ideas and steps…
Q: Alternatively, it is estimated that there is a .95 probability of only slight losses of around $1…
A: ANSWER IS AS BELOW:
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: The expected value of the random variable is defined as its long-term average level based on its…
Q: A company is considering either (1) purchasing equipment for use on a new project (purchase cost =…
A: From the given information, Alternative 1: Purchasing equipment for use on a new project Purchase…
Q: obs arrive at Loaf Machine Shop. Assume the arrival rate is five jobs per hour. Service times (in…
A: Given:For design A:Mean service time= 6S.d=3For design B:Mean service time= 6.25S.d=0.6
Q: A computer repair service has a design capacity of 80 repairs per day. Its effective capacity,…
A: A computer repair shop has the following features: 1) An 80-repair-per-day design capacity. 2) Its…
Q: What is the expected output for a plant with a design capacity of 108 chairs per day, if its…
A: Capacity is the ability of the process to manufacture maximum output with the available resources…
Q: If a 500-room resort generated a TREVPAR of $200’000 (on annual basis), an occupancy of 80% and its…
A:
Q: (a) An art dealer's client is willing to buy the Sunflower painting at $50,000. The dealer can buy…
A: The question demands to make a decision tree and determine the strategy that will maximize the…
Q: The president of AS Electronics, Inc., has two design options for his new line of cathode ray tubes…
A: 1.
Q: A manager is trying to decide whether to build a small, medium or large facility. Demand can be low,…
A: A decision tree is a layout of the potential results of a progression of related decisions. It…
Q: You are employed by Univeristy of Gujrat , a university that provides a range of training and…
A: A memo is a way to share some information or knowledge with the audience, or the employees of the…
Q: Your firm is considering purchasing an old office building with an estimated remaining service life…
A:
Q: A manager is trying to decide whether to build a small, medium, or large facility. Demand can be…
A: The maximin practice implicates choosing the option that maximizes all the minimum pay-off possible.…
Q: Mars Incorporated is interested in going to market with a new fuel savings device that attaches to…
A: The question is related to the cash flow in case the outsource the production. In case of ousource…
Q: Tesla engineering center is trying to decide whether to make or buy a part (#T-63NFT) in its…
A: Thank you for posting the question,As per our policy we will be answering the first three questions…
Q: Sarah Chang is the owner of a small electronics company. In six months, a proposal is due for an…
A: Now, Chang decides to use exponential utility function. For this, click on node A29 and choose…
Q: To purchase new processing equipment, a manager must decide on the number of spare parts to order…
A: Given data: Cost of stocks out (Cs)= Cost of Excess Inventory Ce=
Q: A product is composed of four parts. In order for the product to function properly in a given…
A: The probability that Product Will function Properly = 0.96*0.96*0.99*0.99 = 0.9033
Q: A small building contractor has recently experienced two successive years in which work…
A: a. Under the Maximax approach the highest payoff for each alternative is chosen and finally the best…
Q: A renowned restaurant chain business would like to expand in grocery store business in a year’s…
A: If a restaurant chain business would like to expand into grocery store business within an years time…
Q: Williams Auto has a machine that installs tires. The machine is now in need of repair. The…
A: Decision to either repair or replace the machine can be effectively taken by making a comparison…
Q: 50-Step Assembly Line Consider an assembly line with 50 steps that are carried out sequentially.…
A: Formula:
Q: product design engineer must decide if a redundant component is cost justified in a certain system.…
A: The success of critical component = 0.96 Probability of Failure of Component = 1 - Success…
Q: A project will cost $45,000 to develop.• When the system becomes operational after a one-year…
A: Year Cash Flows Cumulative Cash Outflows: Initial Investment 0 (45,000) (45,000)…
Q: An airline company has been contracting a maintenance company to do overhauls for its planes at a…
A: Let the number of planes be x per quarter Current cost per quarter = 51275 per plane Cost after…
Q: Sometimes, a consumer does not choose an option that maximizes utility. Why?” Justify and give three…
A: Utility means a want satisfying power of a commodity and a product without utility is worthless…
Q: A company is considering two different vehicles for its fleet. Vehicle A has an initial cost of…
A: Given :Vehicle AInitial cost = $ 50,000AOC = $ 1000n = 10 yearsi = 6 %Salvage value = $18000 Vehicle…
Q: A manager is trying to decide whether to build a small, medium, or large facility. Demand can be…
A: Option (A): It contains all the nodes with decision nodes. Hence, option (A) is incorrect. Option…
Q: Develop a decision tree that can be used to solve Chang’s problem. You can assume in this part of…
A: A Decision Tree is the Graphical display of the progression of Decision and random events. The…
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: Given data: Alternative Scenario Probability Possibleprofit/loss(Impact) Build New Plant ATR…
Q: A manufacturing company is considering the acquisition of a new injection-molding machine at a cost…
A:
Q: Jobs arrive at Loaf Machine Shop. Assume the arrival rate is five jobs per hour. Service times (in…
A: Given: For design A:mean service time = 6S.D = 3For design Bmean service time = 6.25S.D = 0.6
Q: RFID technology is used to track the location of goods in transit and in store. Select one: a.…
A: RFID which stands for radio frequency identification technology is one of the forms of identifying…
Q: The frequency of breakdown of a machine that issues lottery tickets is given in the following…
A: Any production system using machines will have its share of breakdowns. Every breakdown means a cost…
Q: The maintenance expense on a piece of machinery is estimated as follows. Maintenance for the 1st…
A: Given, Maintenance- P150 Interest- 8%
Q: Jawad has calculated the possible profits from three different scenarios for the expansion of his…
A: Advertising is basically a paid form of Publicity. A company pays to the advertising media for doing…
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: Probability = 0.40 Expected profit without suit = $40000 Expected profit with suit =$ 20000…
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A:
Q: •A mediçal doctor doing a bypass surgery to his patient is involved in Php 2 million malpractice…
A: The total suit amount is 2 million out of which 1.75 million is the redressal amount and 0.25…
Q: Microfix Inc. Microfix Inc. has been manufacturing peripherals for microcomputers for the past…
A: The cycle time is referred to as the maximum time within which a finished product exits from the…
Q: Three methods can be used for producing heat sensors for high-temperature furnaces. Method A will…
A: Apply fixed cost and breakeven point FC=Cost(A/P, interest rate, life)+ percentage salvage value…
Q: Illustrate how a hotel, restaurant, or theater can deal with the intangibility, inseparability,…
A: Intangibility refers to the inability of the customer to previously assess the value of using a…
You have two design options for your new line of high-resolution monitors for Computer-Aided Design (CAD)workstations. The production run is for 110,000 units.
Design option A has a .90 probability of yielding 65good monitors per 100 and a .10 probability of yielding 70good monitors per 100. This design will cost $1,000,000.
Design option B has a .80 probability of yielding 65good units per 100 and a .20 probability of yielding 60good units per 100. This design will cost $1,350,000.
Good or bad, each monitor will cost $75. Each good monitor will sell for $150. Bad monitors are destroyed and have no salvage value.
We ignore any disposal costs in this problem.
Demonstrate how decision trees can be used in order to choose the design option based on the above situation.
Calculate the expected monetary value (EMV) of each option and determine which option you will propose.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
- a bread manufacturer relies on maintenance employees to keep its rather quite old production equipment for their operation. Whenever the equipment breaks down, the maintenance team is able to repair the equipment quickly. However, they are less effective at avoiding these breakdowns and cannot predict when the equipment will break down. The maintenance group has modified the equipment over the years and, in any event, the manufacturer of the equipment is no longer in business. The maintenance employees teach each other how to repair the equipment, but have refused to document any of this information (saying that it is too difficult to document these details). The company owner has thought about firing the maintenance staff unless they document the maintenance procedures, but realizes that there is no one else who can repair the equipment. Discuss or explain the sources or types of power and contingencies (moderator) of power among the maintenance employees in this situation.Deborah Kellogg buys Breathalyzer test sets for the Denver Police Department. The quality of the test sets from her two suppliers is indicated in the following table: percent defective probability for winter park probability for technology dayton enterprise 1% 0.65 0.25 3% 0.25 0.25 5% 0.10 0.50 For example the probability of getting a batch of tests that are 1% defective from Winter park technology is 0.65. Because Kellogg orders 10,000 tests per order, this would mean there is a 0.65 probability of getting 100 defective tests out of the 10,000 tests if Winter park technology is used to fill the order. A defectice breathalyzer test can be repaired for $0.50. Although the quality of the…Topford supplies X-Data DVDs in lots of 50, and they have a reported defect rate of 0.5% so the probability of a disk being defective is 0.005. It follows that the probability of a disk being good is 0.995. What is the probability of getting at least one defective disk in a lot of 50? Group of answer choices None of the above 0.0562 Approximately 0 0.0246
- Tesla engineering center is trying to decide whether to make or buy a part (#T-63NFT) in its transmission module. Purchasing the part would cost $1.50 each. If they design and produce it themselves, it will result in a per-unit cost of $0.75. However, the design investment would be $50,000. Further, they realize that for this type of part, there is a 30% chance that the part will need to be redesigned at an additional cost of $50,000. Regardless of whether they make or buy the part, Tesla will need 100,000 of these parts. Use decision trees analysis to calculate the expected monetary value (EMV) and make decision. Please draw a decision tree for analysis. What is the cost if Tesla decide to make the part but the part needs to be redesigned? What is the cost if Tesla decide to make the part and the part does not need to be redesigned? What is the EMV if Tesla decide to make the part? What is the EMV if Tesla decide to buy the part? How would the “30% chance for redesign” come from?…Your company has asked you to determine the financial risks of manufacturing 6,000 units of a product rather than purchasing them from a vendor at $66.50 per unit. The production line will handle exactly 6,000 units and requires a one-time setup cost of $50,000. The production cost is $60/unit. Your manufacturing personnel inform you that some of the units may be defective, as shown below: % defective 0 1 2 3 4 probability of 40 30 20 6 4 occurrence (%) Defective items must be removed and replaced at a cost of $145/defective unit. However, 100 percent of units purchased from vendors are defect-free. Construct a payoff table, and using the expected-value model, determine the financial risk and whether the make or buy option is best.1. Suppose that you are an ammunition manufacturer and that your manufacturing process yields a true % of defects of 2.5%. The probability of accepting a lot of 40,000 cartridges for a sample of 3000 with 15 defects is 85%. The AOQ for this set of 40,000 cartridges is _____ %. 2. You are the process improvement manager and have just purchased a metal sheet roller to form gasket material for high-performance engines. You are excited because the company's goal is 6 sigma (no more than 3.4 defects per million) and this machine may be the innovation that you need. The gaskets cannot be more than 0.0002 in from the required thickness of 0.025 in. You want to know if you should replace the existing roller that has a Cpk = 1.0. The new sheet roller has a Cpk = ___. Round the answer to 2 decimal places.
- A product engineer has developed the following equation for the cost of a system component: C = (10P) 2, where C is the cost in dollars and P is the probability that the component will operate as expected. The system is composed of two identical components, both of which must operate forthe system to operate. The engineer can spend $173 for the two components. To the nearest two decimal places, what is the largest component probability that can be achieved?Digital Controls, Inc. (DCI), manufactures two models of a radar gun used by police to monitor the speed of automobiles. Model A has an accuracy of plus or minus 1 mile per hour, whereas the smaller model B has an accuracy of plus or minus miles per hour. For the next week, the company has orders for 100 units of model A and 150 units of model B. Although DCI purchases all the electronic components used in both models, the plastic cases for both models are manufactured at a DCI plant in Newark, New Jersey. Each model A case requires 4 minutes of injection-molding time and 6 minutes of assembly time. Each model B case requires 3 minutes of injection-molding time and 8 minutes of assembly time. For next week, the Newark plant has 600 minutes of injection-molding time available and 1,080 minutes of assembly time available. The manufacturing cost is $10 per case for model A and $6 per case for model B. Depending upon demand and the time available at the Newark plant, DCI occasionally…XYZ General Hospital is evaluating new office equipment offered by three companies. In each case the interest rate is 15% and the useful life of the equipment is 4 years. Use NPW analysis to determine the company from which you should purchase the equipment. A B First Cost $15, 000 $25, 000 $20, 000 Maintenance Cost 1, 600 400 900 Annual Benefit Salvage value 13, 000 6, 000 8, 000 11, 000 3, 000 4, 500
- Andrew Thomas, a sandwich vendor at Hard Rock Cafe's annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd) States of Nature (demand) Average $12,000 $9,000 $8,100 Big Small $22,000 -$2,000 Alternatives Large Stock Average Stock Small Stock $12,000 $6,000 $9,000 $4,000 The probabilities associated with the states of nature are 0.20 for a big demand, 0.45 for an average demand, and 0.35 for a small demand a) The alternative that provides Andrew Thomas the greatest expected monetary value (EMV) isThe number of yearly breakdowns for the power generator observed over the past 20 years at Orlando Utilities is presented in the following data: Number of breakdowns 0 1 2 3 4 5 6 Number of years in which breakdowns occurred 2 2 5 4 5 2 0 For Orlando Utilities, the expected number of breakdowns = (round your response to two decimal places).A rural cooperative purchased a trencher at a cost of P230,500.00. It is estimated that the trencher will have a salvage value of P25,000.00 after digging 300,000 meters of irrigation canals. Determine the book value of the trencher after two years, if it was used to dig 50,000 meters on the first year and 75,000 meters on the second year. (Ans. P144,875.00)