Question

Section-"B (10 Marks) Answer all questions (CLO2, CLO3,CLO& CLO) Q1. Etisalat planning to enter new markets in West Africa in Cameron, Senegal, or Ghana. It will take approximately two years to build the necessary infrastructure, construct the new facility and put it into operation. The expected company profit differs between countries depending on the financial, labor, and political climate. The profits (in millions AED) that will result from each decision in the event of state of nature are shown in the following table below is one of the world's leading telecom companies in emerging markets. It is (1.5 Marks) Country State of Nature: Economic/political climate Decline 130.20Improve -100.00 150.90 Camerorn Senegal Ghana 195.70 210.60 190.00 Determine the best decision using the following decision criteria? Maxmin Maximax Hurwicz (coefficient of optimism 0.4) . Q2. The equation y 210 +3x is used to predict quarterly sale where x - 0 in the second quarter of last year. Quarterly seasonal factors are Quarter 1 1.5, Quarter 2-0.8, Quarter3 - 1.1, and Quarter 4 0.5. What is the forecast for the third quarter of this year? (2 Marks)

Answer 1

1 Maximin a) Under Maximin criteria first minimum value for each country under various states of nature are considered and then maximum of these minimum values is selected State of Nature Country Decline 130.2 100 150.9 Improve 195.7 210.6 190 Maximin 5 Cameron 6 Senegal 7 Ghana MIN(B5:C5) MIN(B6:C6) -MIN(B7:C7) 9 Choose Ghana 10 11 Maximax Under Maximax criteria first maximum value for each country under various states of nature are considered and then maximum of these maximum values is selected 12 13 14 15 Cameron 16 Senegal 17 Ghana 18 Choose Senegal State of Nature Country Decline 130.2 100 150.9 Improve 195.7 210.6 190 Maximax MAX(815:C15) -MAX(B16:C16) MAX(B17:C17)

1 Maximin a) Under Maximin criteria first minimum value for each country under various states of nature are considered and then maximum of these minimum values is selected State of Nature Country 5 Cameron 6 Senegal 7 Ghana DeclineImprove Maximin 195.7 130.2 100 150.9 130.2 100 150.9 210.6 190 9 Choose Ghana 10 11 Maximax Under Maximax criteria first maximum value for each country under various states of nature are considered and then maximum of these maximum values is selected 12 13 14 15 Cameron 16 Senegal 17 Ghania 18 Choose Senegal State of Nature Country DeclineImprove Maximax 130.2 195.7 195.7 100210.6 210.6 190 150.9 190

19 20 Hurwitz criteria 21 Best weighted avera State of Nature 23 Country Decline Improve 24 Cameron 130.2 195.7 SUMPRODUCTISBS28:SC$28,824:C24) Co.efficient of optimism- Improve 0.4 25 Senegal 26 Ghana 27 28 weights 29 30 Choose Ghana 31 32 100 150.9 SUMPRODUCT(SB$28 $C$28,825:C25) Co.efficient of pessimism-Decline -SUMPRODUCT(SBS28:$C$28,B26:C26) 210.6 1-F24 190 0.6 0.4

19 20 Hurwitz criteria 21 Best weighted average profit is chosen under this criteria State of Nature Country 23 DeclineImprove Co.efficient of optimism- 24 Cameron130.2195.7 156.4 Improve 0.4 Co.efficient of 24.24 pessimism-Decline 25 Senegal 26 Ghana 27 28 weights 29 30 Choose Ghana 31 100 210.6 0.6 150.9 190 166.54 0.6 0.4