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David sells all of the chemical at $20 per gallon., so his shortage means that David looses $5 to buy the expensive chemical.ĭetermine the expected value of perfect information If David does run out, he has agreed to purchase a comparable chemical from a competitor at $23 per gallon. Furthermore, David has guaranteed to his suppliers that there will always be an adequate supply of K-1000. It can, however be sold at a salvage value of $13 per gallon. If K-1000 is not sold after the batch run, the chemical looses much of it's important properties as a developer. In the past, David has allocated advertising costs to k-1000 at $ per gallon. Manufacturing costs is $12 per gallon, and handling costs and warehousing costs are estimated to be $1 per gallon. The question facing David is how many gallons to produce of k-1000 in the next batch run. The probabilities of selling 1,000, 15,000 and 2,000 gallons are. Using historical data, David Coren was able to determine that the probability of selling 500 gallons of k-1000 is.2. Unfortunately, K-1000 has a very short shelf life of about one month.Ĭoren Chemical produces k-1000 in batches of 500 gallons, 1,1000 gallons, and 1,500 and 2,000. This reduces stup costs and allows Coren Chemical to produce k-1000 at a competitive price. To produce k-1000 efficiently, Coren Chemical uses the batch approach in which a certain number of gallons is produced at one time.
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One of their products, K-1000 is used by several photographic companies to make a chemical that is used in the film-developing process. Coreen Chemical Inc develops industrial chemicals that are used by other manufacturers to produce photographic chemicals preservatives and lubricants.
QM FOR EXCEL DECISION ANALYSIS ERROR HOW TO
I cannot find a tutorial for this program or how to use it anywhere. Draw an appropriate picture to support your responses.
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Conduct sensitivity analysis to help this person. Suppose that Desmond wants to make investment decision between bonds and stocks only. What is the maximum amount that should be paid for a perfect forecast of the economy 2-2. Need to do problem 3.49 in Quantitative analysis for Management 11th Edition. What decision would maximize expected profit(b). Having trouble with Qm for Excel and Decision tree.