The Bell computer company is focused to increase their operations of different product line related to various computer products. The company has looking for 2 available options for the expansion (Medium and Large Expansion). The management of the company must take decision in regards of expansion according to the demand probability of 20%. 50% and 30%. The management of the company also do a proper risk analysis for the short term as well as long term aspects to check the which way company able to generates more profit. Below mentioned reports shows the company annual profits in different demand scenario (All number in Si000s)

With the help of above analysis of Medium Scale and Large Scale the company able to generates higher profit with Medium Scale which is $145,000. The medium expansion annual profits will be added then multiply with the percentage so we able to get the $145,000. Same steps we followed under the Large Scale expansion and we able generates the profit of $140,000. According to demand of probability the above analysis shows the expected profits.
1- Bell Computer Company
€¢ Compute the expected value for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of maximizing the expected profit?
€¢ Compute the variation for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk or uncertainty?
2- Kyle Bits and Bytes
€¢ What should be the re-order point? How many HP laser printers should he have in stock when he re-orders from the manufacturer?

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Medium-Scale Large-Scale Expansion Profits Annual Profit Expansion Profits P(x) 20% Annual Profit Demand P(x) 20% Low Medium 50 150 50% 100 50% 30% High 30% 200 300 Expected Profit 145 140