BUSN 3430 Operations Management EXTRA CREDIT 1. Problem A2 (Skip pan 6) and Problem A3 (File name: Decision Analysispdt) The pdf File names can be found on Blackboard under \"Course Documents\" Late submission will not be accepted for any reason. Do not submit as an attachment to my email. Submit your solution to Blackboard Due Date: Monday December 19th, 2022 @ 11:59 PM 5. 6, or 7 cases. Stock 3 CASES V SOLUTION Block Of rashe The decision tree is shown in Figure A.5 Stock : cases demand is 5 case Onmanus ? cases A FIGURE A.5 Demand at Ravinder Nath's Supermarket Problems* A.1 Given the following conditional value table. determine b) What is the maximax decision? the appropriate decision under uncertainty using: ") What is the maximin decision? al Maximax d) What is the equally likely decision? b) Maximin e) Develop a decision tree. Assume each outcome is equally liker ") Equally likely PX then find the highest EMV. Px 2: A.3 Clay Whybark . a soft-drink vendor at Hard Rock States of Nature Cafe's annual Rockfest, created a table of conditional values for the Very Favorable Average Unfavorable various alternatives (stocking decision) and states of nature in. Alternatives Market Market Market of crowd): Build new plant $350.000 $240,000 -$300.000 Subcontract $180.000 $ 90,000 -$ 20,090 States of Nature (demand Overtime $1 10.000 $ 60.000 -$ 10.000 Alternatives Big Average Small Do nothing $ 0 Large stock $22.000 $ 12.000 -$2.000 Average stock $14.000 $10.000 $6.0XXX .. . A.2 Even though independent gasoline stations have been Small stock $ 9,090 $ 8.000 $4.000 having a difficult time, Susan Helms has been thinking about start- ing her own independent gasoline station. Susan's problem is to decide how large her station should be. The annual returns will The probabilities associated with the states of nature are 0.3 for a depend on both the size of her station and a number of marketing big demand, 0.5 for an average demand, and 0.2 for a small demand factors related to the oil industry and demand for gasoline. After a a) Determine the alternative that provides Clay Whybark the great careful analysis, Susan developed the following table: est expected monetary value (BMV). b) Compute the expected value of perfect information (EVPU. Size of Good Fair Poor A.4 Raymond Jacobs owns a health and fitness center. the First Station Market ($) Market ($) Market ($) Muscle-Up, in Ashland. He is considering adding more floor space to meet increasing demand. He will either add no floor space (N). a Small 50,000 $20,060 -10.000 moderate area of floor space (M. a large area of floor space (.). er Medium 80:000 20.000 20.000 100,000 30.090 -40,000 an area of floor space that doubles the size of the facility in: Large Demand will either stay fixed. increase slightly. or increase greath Very large 300,909 25,000 60.000 The following are the changes in Muscle-Up's annual profits under each combination of expansion level and demand change level. For example, if Susan constructs a small station and the market is good, she will realize a profit of $50,000. a) Develop a decision table for this decision, like the one illustrated Expansion Level Demand Change N M D In Table A.2 earlier Fixed 0 $4,000 -$10,000 -$50,060 Notes X means the problem may be solved with POM for Windows Slight Increase $2.000 $8.000 $ 6.000 $ 4,000 Major Increase $3.000 $9,000 $20.000 $40.000 and/or Excel OM