A.Prepare a summary which shows the budgeted contribution earned by the centre for the year ended 30 June 2020 for each of the nine possible outcomes.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
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A health centre specializes in the provision of sports/exercise and medical/dietary advice to clients. The service is provided on a residential basis and clients may stay for whatever number of days to suit their needs. Budgeted estimates for the year ending 30 June 2020 are as follows:
(i) The maximum capacity of the centre is 50 clients per day for 350 days in a year. (ii) Clients will be invoiced at a fee per day. The budgeted occupancy level will vary with the client fee level per day and is estimated at different percentages of maximum capacity as follows:
(iii) Variable costs are also estimated at one of three levels per client day. The high, most likely and low levels per client day are RM95, RM85 and RM70 respectively.
The range of cost levels reflects only the possible effect of the purchase prices of goods and services.
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A.Prepare a summary which shows the budgeted contribution earned by the centre for the year ended 30 June 2020 for each of the nine possible outcomes.
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B.State the client fee strategy for the year to 30 June 2020 which will result from the use of each of the following decision rules. (i) Maximax. (ii) Maximin. (iii) Minimax regret. Your answer should explain the basis of operation of each rule. Use the information from your answer to (a) as relevant and show any additional working calculations as necessary.
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C.“A fundamental characteristic of all decision problems is that the outcome is uncertain. Since the data are estimates of future events, it is not possible to predict decision outcomes with the perfect accuracy”. In relation to the above statement, briefly discuss the application of the following methods to reduce the effects of uncertainty: (i) Sensitivity Analysis (ii) Decision Tree with probabilities.
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