“BADM 3963 Summer 2015 Makeup
Homework

This (optional) assignment may be used to replace your grade for one of the semesters
assignments.

All
work and answer reporting is to be done in an Excel spreadsheet file. Put each problem on a separate worksheet.

On
the first worksheet of your file (under your name) indicate which assignment
grade you wish to have replaced.

Submit
in BB. Due Thursday July 16, 9pm

1. The owners of Jumpin
Joes, a fireworks stand in Okema, OK are attempting to determine how many of their
famous SuperSonic fireworks package
to put together for the upcoming July 4th sales period. Company records show that each package costs
$53 to make. Jumpin Joes plans
to sell each package for $89.
Unsold packages
will be sold after the 4th at a discount price of $45. They expect all of the unsold packages will
be sold at that price.

Develop a
spreadsheet model to calculate profit with pre-
4th quantity demanded as an unknown variable and quantity
of packages made as a decision variable. (note: this model will require the
IF function)

a. What is the total profit if 400 SuperSonic packages were put together,
it rained the week before the 4th and pre-4th demand was
only 236?

b. Create a two-way table, using Excels Data/What-If/ Data Table tool, to
demonstrate the sensitivity of profit to changes in demand and quantity
packaged.
Make pre-4th
Demand the row variable, Quantity
packaged the column variable. Use values
of 300, 350, 400, 450 and 500 for both
the demand and packaging quantities in the table.

2. Summerside Properties is planning to build a
condominium development in Corpus Christie, Texas. The company is trying to decide between
building a small or large development.
The payoffs received for each development will depend on the market
demand for condominiums in the area, which could be low or high. Without any further information estimated market
demand probabilities are 50% for low demand and 50% for high demand.

The
payoffs for a small development are 105 if demand is low, 125 if demand is
high. For a large development, the
payoff is expected to be 95 if demand is low and 175 if demand is high.

Before
Summerside makes the decision on size of development, the property manager is
considering whether or not to hire a consultant to study the market more
thoroughly. The market study is expected
to predict a favorable market 85% of the time and an unfavorable market 15% of
the time.

If the
study is favorable, the probability of low demand will be 0.20, the probability
of high demand will be 0.80
If the
study is unfavorable, the probability of low demand will be 0.90, the
probability of high demand is 0.10.

The
payoffs will reflect the cost of the study if the study is done. A small development would have a payoff of 90 if demand is low and 110 if demand is
high. A large development would to have
a payoff of 80 if demand is low and 160 if demand is high.

Draw
a decision tree to represent this problem

Solve
the tree

Report
your complete recommendation BADM 3963 Summer 2015 Makeup
Homework
This
(optional) assignment may be used to replace your grade for one of the semester
assignments.
All
work and answer reporting is to be done in an Excel spreadsheet file. Put each problem on a separate worksheet.
On
the first worksheet of your file (under your name) indicate which assignment
grade you wish to have replaced.
Submit
in BB. Due Thursday July 16, 9pm1. The owners of Jumpin
Joes, a fireworks stand in Okema, OK are attempting to determine how many of their
famous SuperSonic fireworks package
to put together for the upcoming July 4th sales period. Company records show that each package costs
$53 to make. Jumpin Joes plans
to sell each package for $89. Unsold packages
will be sold after the 4th at a discount price of $45. They expect all of the unsold packages will
be sold at that price. Develop a
spreadsheet model to calculate profit with pre-
4th quantity demanded as an unknown variable and quantity
of packages made as a decision variable. (note: this model will require the
IF function)a. What is the total profit if 400 SuperSonic packages were put together,
it rained the week before the 4th and pre-4th demand was
only 236?b. Create a two-way table, using Excels Data/What-If/ Data Table tool, to
demonstrate the sensitivity of profit to changes in demand and quantity
packaged. Make pre-4th
Demand the row variable, Quantity
packaged the column variable. Use values
of 300, 350, 400, 450 and 500 for both
the demand and packaging quantities in the table. 2. Summerside Properties is planning to build a
condominium development in Corpus Christie, Texas. The company is trying to decide between
building a small or large development.
The payoffs received for each development will depend on the market
demand for condominiums in the area, which could be low or high. Without any further information estimated market
demand probabilities are 50% for low demand and 50% for high demand.The
payoffs for a small development are 105 if demand is low, 125 if demand is
high. For a large development, the
payoff is expected to be 95 if demand is low and 175 if demand is high.Before
Summerside makes the decision on size of development, the property manager is
considering whether or not to hire a consultant to study the market more
thoroughly. The market study is expected
to predict a favorable market 85% of the time and an unfavorable market 15% of
the time.If the
study is favorable, the probability of low demand will be 0.20, the probability
of high demand will be 0.80If the
study is unfavorable, the probability of low demand will be 0.90, the
probability of high demand is 0.10.The
payoffs will reflect the cost of the study if the study is done. A small development would have a payoff of 90 if demand is low and 110 if demand is
high. A large development would to have
a payoff of 80 if demand is low and 160 if demand is high.
Draw
a decision tree to represent this problem
Solve
the tree
Report
your complete recommendation “