QNT 561 UP Bell Computer Company Expansion Strategy & Establishing Re Order Point Essay

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Business Finance

Qnt 561

University of Phoenix

QNT

Description

Write a 1,050-word report based on the Bell Computer Company Forecasts data set and Case Study Scenarios.

Include answers to the following:

Case 1: Bell Computer Company

  • Compute the expected value for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of maximizing the expected profit? Justify your answer.
  • Compute the variation for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk or uncertainty? Justify your answer.

Case 2: Kyle Bits and Bytes

  • Using the normal distribution, determine what the re-order point should be. In other words, how many HP laser printers should he have in stock when he re-orders from the manufacturer? Show your work. Also, do not use safety stock or other advanced inventory theory.

Format your assignment consistent with APA format.

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Explanation & Answer

Please find answer.Let me know for any clarifications.Pleasure working with you.Good Bye.

Medium-Scale
Expansion Profits

Low
Demand Medium
High
Expected Profit ($1000s)

Annual
Profit
($1000s)
50
150
200
145

Large-Scale
Expansion Profits

Annual
Profit
P(x) ($1000s)
20%
0
50%
100
30%
300

P(x)
20%
50%
30%
140

Risk Analysis for Medium-Scale Expansion
Annual Profit
(x)
Probability
P(x)
(x - µ)2 (x - µ)2 * P(x)
Demand $1000s
(x - µ)
Low
50
20%
-95
9025
1805
Medium
150
50%
5
25
12,5
High
200
30%
55
3025
907,5
2
σ =
2725
σ=
52,20
Risk Analysis for Large-Scale Expansion
Annual Profit
(x)
Probability
P(x)
(x - µ)2 (x - µ)2 * P(x)
Demand $1000s
(x - µ)
Low
0
20%
-140
19600
3920
Medium
100
50%
-40
1600
800
High
300
30%
160
25600
7680
2
σ =
12400
σ=
111,36


SCENARIOS

1

Case Study Scenarios

Name
University
Course
March 29, 2020

SCENARIOS

2
Case Study: Bell Computer Company

The report is aimed to reach a conclusion on the expansion strategy of Bell Computer
Company. The Bell Computer Company case study advocates the prospect of two expansion
strategies- one related to medium scale and the other one pertaining to a large scale. The need
for the medium scale and large scale is branched into three sections namely -low, medium or
high. The probability of medium demand is highest being 0.5 followed by the probability of
high demand and low demand being 0.3 and 0.2 respectively. In the case of medium-scale
expansion, the individual profit for low, medium and high demand amounts to
$50,000,$150,000 and $200,00 respectively. In addition to this, the a...


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