Expansion Strategy and Establishing a Re-Order Point, statistics homework help

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rneynaqen

Mathematics

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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.

Unformatted Attachment Preview

Expansion Strategy and Establishing a Re-order Point Grading Guide QNT/561 Version 9 Applied Business Research and Statistics Copyright Copyright © 2017, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008 by University of Phoenix. All rights reserved. University of Phoenix® is a registered trademark of Apollo Group, Inc. in the United States and/or other countries. Microsoft®, Windows®, and Windows NT® are registered trademarks of Microsoft Corporation in the United States and/or other countries. All other company and product names are trademarks or registered trademarks of their respective companies. Use of these marks is not intended to imply endorsement, sponsorship, or affiliation. Edited in accordance with University of Phoenix® editorial standards and practices. Expansion Strategy and Establishing a Re-order Point Grading Guide QNT/561 Version 9 Individual Assignment: Expansion Strategy and Establishing a Re-order Point 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. Resources Required • • • Microsoft Excel® Bell Computer Company Forecasts data set Case Study Scenarios Grading Guide Content Met Partially Met Not Met 3 #/3 Partially Met Not Met Comments: Write a 1,050-word report based on the Bell Computer Company Forecasts data set and Case Study Scenarios. 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? Writing Guidelines Met Comments: 2 Expansion Strategy and Establishing a Re-order Point Grading Guide QNT/561 Version 9 Writing Guidelines Met Partially Met Not Met Total Available Total Earned 2 #/2 5 #/5 The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements. Intellectual property is recognized with in-text citations and a reference page. Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper. Sentences are complete, clear, and concise. Rules of grammar and usage are followed including spelling and punctuation. Assignment Total Additional comments: # Comments: 3 Low Demand Medium High Medium-Scale Large-Scale Expansion Profits Expansion Profits Annual Annual Profit Profit ($1000s) ($1000s) P(x) P(x) 50 20% 0 20% 150 50% 100 50% 200 30% 300 30% Expected Profit ($1000s) 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% Medium 150 50% High 200 30% σ2 = σ= 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% Medium 100 50% High 300 30% σ2 = σ= Case Study – Week 3 Individual Assignment QNT/561 Version 9 University of Phoenix Material Case Study – Bell Computer Company The Bell Computer Company is considering a plant expansion enabling the company to begin production of a new computer product. You have obtained your MBA from the University of Phoenix and, as a vicepresident, you must determine whether to make the expansion a medium- or large- scale project. The demand for the new product involves an uncertainty, which for planning purposes may be low demand, medium demand, or high demand. The probability estimates for the demands are 0.20, 0.50, and 0.30, respectively. Case Study – Kyle Bits and Bytes Kyle Bits and Bytes, a retailer of computing products sells a variety of computer-related products. One of Kyle’s most popular products is an HP laser printer. The average weekly demand is 200 units. Lead time (lead time is defined as the amount of time between when the order is placed and when it is delivered) for a new order from the manufacturer to arrive is one week. If the demand for printers were constant, the retailer would re-order when there were exactly 200 printers in inventory. However, Kyle learned demand is a random variable in his Operations Management class. An analysis of previous weeks reveals the weekly demand standard deviation is 30. Kyle knows if a customer wants to buy an HP laser printer but he has none available, he will lose that sale, plus possibly additional sales. He wants the probability of running short (stock-out) in any week to be no more than 6%. Copyright © 2017 by University of Phoenix. All rights reserved. 1
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Explanation & Answer

Attached.

Running head: BELL COMPUTER COMPANY AND KYLE BITS AND BYTES

Bell Computer Company and Kyle Bits and Bytes
Name
Course
Institution

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BELL COMPUTER COMPANY AND KYLE BITS AND BYTES

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Case 1 Bell Computer Company
The Bell Company is considering expanding to maximize its presence in the industry. It is,
therefore, necessary to ensure that there is a better understanding of key issues within an
organizational context. The Bell Company is considering two options for its expansion strategy,
medium expansion or large expansion. Therefore, it is important to consider analysis to create a
significant environment where a better decision can be made. In both medium and large scale
expansion, the demand can assume low, medium and high where the profit margin is varying based
on the level of demand. Low, medium and high demand assumes the probabilities 0.2, 0.5 and 0.3
respectively. This means that there exist 20% chance that under both medium and large expansion
the demand will be low, 50% that the demand will be medium and 30% chance that the demand
will be high.
When considering medium expansion, the anticipated profits include $50,000 under low
demand, $150,000 under medium demand and $200,000 under high demand. Under the Large
expansion, the expected profits include $0 under low demand, $100,000 under medium demand
and $300,000 under high demand. Therefore, in this case, it is very clear that large expansion is
likely to generate high profits, especially in high demand although there exists only 30% chance
that the demand will be high. This shows that choosing large-scale expansion is a risk...


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