# Purpose of Assignment, Strategy and Establishing a Re-Order Point, assignment help

*label*Mathematics

*timer*Asked: May 16th, 2017

*account_balance_wallet*$10

**Question description**

**Purpose of Assignment**

This assignment has two cases. The first case is on expansion strategy. Managers constantly have to make decisions under uncertainty. This assignment gives students an opportunity to use the mean and standard deviation of probability distributions to make a decision on expansion strategy. The second case is on determining at which point a manager should re-order a printer so he or she doesn't run out-of-stock. The second case uses normal distribution. The first case demonstrates application of statistics in finance and the second case demonstrates application of statistics in operations management.

**Assignment Steps**

**Resources: **Microsoft Excel®, Bell Computer Company Forecasts data set, Case Study Scenarios

**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?
- 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?

Case 2: Kyle Bits and Bytes

- What should be the re-order point? How many HP laser printers should he have in stock when he re-orders from the manufacturer?

**Format** your assignment consistent with APA format.

References and intext citation minimum 2

Submit 2 files

1. word document showing all the work done and the minimum 1,050-word report

2. Excel file showing all the calculations, graphs and numbers

NOTE: Attached files are the needed resources to start this assignemnt follow all of them

## Tutor Answer

Attached.

Running Head: CASE STUDY

1

Case Study

Institutional Affiliation

Date

CASE STUDY

2

Case 1: Bell Computer Company

The bell computer company has only two options of carrying out the expansion. The two options

are the large scale and the medium scale. With the use of the options of expansion, the medium

scale expansion, and the large-scale expansion, the demands can either be high, medium or low

depending on the probability of 0.3, 0.5 and 0.2 respectively (Keeney, & Raiffa, 1993).

In the option of medium scale expansion, the profits may exist as follows in case of high,

medium and low demand, $200,000, $150,000 and $50,000 respectively. For the option of largescale expansion, the profits may appear as follows in case of high, medium and low, $300,000,

$100,000 and $0 respectively.

The current management is facing a tricky dilemma of whether to use the large-scale expansion

or medium scale expansion. The large-scale expansion has a high potential of generating a higher

amount of profits in case of experiencing a high demand. The large-scale expansion will thus

generate a lower profit than the medium scale expansion when in the case of low and medium

demand. During the low demand, the large-scale expansion will give out an output result in nil

profit. In this case, it’s clear that the large-scale expansion gets under a high risk of the low scale

expansion. The anticipated action value is thus the expected value in the case. Generally, various

possible outcomes come as a result of an action. In this case to every action, we thus need to

determine the main probability of occurrence for every outcome got from the action (Keeney, &

Raiffa, 1993).

The value expected is thus calculated by using finding the product of every possible outcome

with their probability of occurrence and adding the all the values respectively so as t...

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