Please Help!! I'm confused on the written responses to each homework
14.13
EMV (Reduce Price) = $160,000 x 0.7 + $120,000 x 0.3
= $148,000
EMV (Maintain Price) = $180,000 x 0.7 + $100,000 x 0.3
= $156,000
Therefore, the company should maintain its price since the EMV with price maintenance is more.
14.14
EMVPI= EMVcertainty - EMVbest
EMVcertainty= $180,000 x 0.7 + $120,000 x 0.3
= $162,000
EMVPI = $162,000 - $156,000= $6000
We choose EMVbest as $156,000 as this is the best response under uncertainty.
14.15
EMV (Reduce Price) = $220,000 x 0.8 + $200,000 x 0.2
= $216,000
EMV (Maintain Price) = $210,000 x 0.8 + $170,000 x 0.2
= $ 202,000
Therefore, the company should reduce its price since the EMV with price reduction is more.
Similarly,
EMVPI= EMVcertainty - EMVbest
EMVcertainty= $220,000 x 0.8 + $200,000 x 0.2
= $ 216,000
EMVPI = $ 216,000 - $ 216,000= $ 0
We choose EMVbest as $216,000 as this is the best response under uncertainty.
EVPI or EMVPI is a measure of how much one is willing to pay for perfect information .
Please Help!! I'm confused on the written responses to each homework Marketing by the Numbers: The...
consider a company faced with a competitor’s price reduction.
Should the company also reduce price in order to maintain market
share or should the company maintain its current price? The company
has conducted some preliminary research showing the financial
outcones of each decision under two competitor responses; the
competition maintains its price or the competition lowers its price
further. The company feels pretty confident that the comprtitor
cannot lower its price furthrr and assigns that outcome a
probability (p) of...
please help!! im so confused
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(6) A manager is deciding whether or not to build a small facility. Demand is uncertain and can be either at a high or low level. If the manager chooses a small facility and demand is low, the payoff is $360. If the manager chooses a small facility and demand is high, the payoff is $100. On the other hand, if the manager chooses a large facility and demand is low,...
ABC Inc. must make a decision on its current capacity for next year. Estimated profits (in $000's) based on next year's demand are shown in the table below.Next Year's Demand Alternative Low Medium HighExpand $100 $200 $250Subcontract $50 $120 $125Do Nothing $40 $50 $ 551). Assume that ABC...
ABC Inc. must make a decision on its current capacity for next year. Estimated profits (in $000's) based on next year's demand are shown in the table below. Next Year's Demand Alternative Low Medium HighExpand $100 $200 $250Subcontract $50 $120 $125Do Nothing $40 $50 $ 55 a. Which alternative should be chosen based on the maximax criterion? b. Which alternative should be chosen based on the maximin...
please help answer the following 8
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(1) Matching: 1. Revenue 2. Fixed cost 3. Variable cost A. does not vary. B. varies according to quantity produced. C. varies according to quantity sold. (2) Sam has started his own company, Sam Shirts, which manufactures Imprinted shirts for special occasions. Since h has just begun this operation, he rents the equipment from a local printing shop when necessary. The cost of using...
please including the steps of each question
Question B6 A soft drink company is going to develop a new flavor of soft drink so as to maximise its profit The new flavor is either mango (d) or pineapple (d). The sales of the new flavored soft drink depend on the demand of the market which is either low (si) or high (52). Estimated profits (in millions HKS) and probability assessments of low and high demands are as follows: Decision Alternative...
Show all calculations to support your answers (a) Describe the advantage in using a payoff matrix to analyse decisions. Explain the steps required in developing such a matrix (b) What advantage do decision trees provide and in what situations are they preferred to a payoff matrix? Goleb is considering the purchase of two types of industrial robots. The ROB1 is a large robot capable of performing a variety of tasks,including welding and painting. The ROB1 is a smaller and slower...
Sleech Ltd operates an information systems company. The firm is preparing its 30 June financial statements, and requires advice concerning the proper treatment of the following situations. Explain how to deal with each situation, and prepare any required jou entries. 1. Sleech Ltd owns a research laboratory which is uninsurable because of the high risk of competitor spying, and poor security systems. Based on previous experience, management firmly believes that a loss of information systems designs will occur during the...
200 Sleech Ltd operates an information systems company. The firm is preparing its 30 June financial statements, and requires advice concerning the proper treatment of the following situations. Explain how to deal with each situation, and prepare any required journal entries 1. Sleech Ltd owns a research laboratory which is uninsurable because of the high risk of competitor spying, and poor security systems. Based on previous experience, management firmly believes that a loss of information systems designs will occur during...
CASE 2 Ryan International In
the world of skateboard attire, instinct and marketing savvy are
prerequisites to success. Moogy Ellis had both. During 2019, his
international skateboarding company, Ryan, rocketed to $900 million
in sales after 10 years in business. His fashion line covered the
skateboarders from head to toe with hats, shirts, pants, shorts,
sweatshirts, socks, and shoes. In L.A., there was a Ryan shop every
five or six blocks, each featuring a different color. Some shops
showed the...