Exam 6: A Quantitative Module

With choice S1, a manager sees gains of $10 million and $6 million. With choice S2, a manager sees gains of $12 million and $8 million. S2 might be the choice of a pessimistic manager.

Which of the following characterizes a highly leveraged company?

The decision tree shows the profit outcomes for a toy store in a strong and a weak economy for next year. What is the expected value of profit for the store for the year?

Which psychological orientation would be typical of a manager who is pessimistic about her business environment?

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. A minimax Bigg manager would choose S2 because it has the smallest maximum regret of 1.

A queuing theory analysis for the Department of Motor Vehicles determines that customers typically wait for 8 minutes and that the agency should strive never to exceed more than 5 customers in a single line. What is the maximum amount of time that customers should be expected to wait?

Mia, a manager at Best Buy, increases the order size for a product that the company sells, which will ________.

In a short essay, explain how managers can use current value for making organizational decisions.

Decision trees show the profit outcomes for the plans for two doughnut stores in two different locations in a strong and a weak economy for the future. If the investor interested in building a store is pessimistic, in which location should she build?

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below. Suppose the plant decides to make the maximum number of iPhone components possible and reach the rest of its capacity by making Droid phones. How much profit will it make? Monthly Product

Which role does uncertainty typically play in how managers function?

Decision trees are unreliable for making pricing decisions.

This payoff matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. From Bigg's point of view, the S2 maximum regret is 9.

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza. What is the maximum regret value for S4?

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. A minimax Bigg manager choosing S3 would have a greatest possible regret of 2.

Mia, a manager at Best Buy, should be able to find Q, the most economic order size for a product, by ________.

In the economic order quantity (EOQ) model, increasing the order size will decrease ordering costs.

In a short essay, explain how carrying costs and ordering costs change with order size in EOQ (economic order quantity) analysis.

In a short essay, explain the type of strategy that a pessimistic manager would take for his company.