Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Qnt 561 week 3

19/11/2020 Client: arwaabdullah Deadline: 24 Hours

Expansion Strategy and Establishing a Re-Order Point

Expansion Strategy and Establishing a Re-Order Point

Bell Computer Company

Medium scale and large scale are the two expansion options for the Bell Computer Company. The demand can be high, medium, or high and 0.2, 0.3, and 0.5 probability for both medium scale expansion and large scale expansion. Profits in the case of high, medium and low demand for medium scale expansion are $200,000, $150,000 and $200,000. Profits in the case of high, medium and low for large scale expansion are $300,000, $100,000 and $0. Choosing the large scale expansion or medium scale expansion is the issue plaguing management. In the case of medium and low demand, large scale expansion will produce lower profits than medium scale expansion but large scale expansion has the potential to generate higher profit in the case of high demand. The large scale expansion has a zero profit for the case of low demand. Obviously, the greater risk comes from large scale expansion rather than low scale expansion.

An expected value is a forecasted value of a variable. A variable has numerous potential outcomes. The first step is determining the probability of occurrence of each outcome. By multiplying each possible outcomes by the probability of occurrence of that outcome and adding all those values, we will get the expected value. In order to choose the expansion option that is most likely to generate higher profit between large scale expansion and medium scale expansion, management need the expected value. The expected values of large scale expansion is $140 and medium scale expansion is $145.

The large scale expansion project has a lower expected value than the medium scale alternative. With that being said, the medium scale expansion is ideal for the objective of make the most of expected profit.

To make a knowledgeable decision, just knowing the expected value is not enough. Knowing how profit can differ from the expected value is also important. Variance is used for this reason. Variance measures the distance a set of random values are scattered from the mean value. A higher variance means that the random values are scattered far away from the mean. The ideal variance is a low variance. The variance of random variables is the expected value of squared deviation from the mean. Mathematically, variance of discrete random variables is calculated as: Var = E[(X-µ)² = Σ[P(X)*(X-µ)²]. The variance of large scale expansion projects are 12,400 and medium scale projects are 2,725. The variation for profit related with large scale expansion is far higher than the variation for profit related with medium expansion.

Standard deviation measures risk, it is a measure used to compute the amount of variation of a data set values. It is calculated as the square root of variance. A Low standard deviation shows that random values have a tendency to be close to the expected value. A lower standard deviation point toward low risk but a higher standard deviation point towards a higher risk. The standard deviation of medium scale is 52.202 and large scale is 111.355.

Since the value of the standard deviation of the medium scale expansion is lower than the value of the standard deviation of the large scale expansion, the medium scale expansion pose less risk. The medium scale expansion is ideal.

Judging from the information gathered, the medium scale expansion has a higher expected value than the large scale expansion and the medium scale incurs a lower risk than the large scale expansion. Therefore, the medium scale expansion should be the choice of management.

Kyle Bits and Bytes

Kyle Bits and Bytes is a retailer of computing products. The HP laser printer is the most popular product at Kyle’s Bits and Bytes. The HP laser printer average a weekly demand of 200 units and its lead time is one week but the demand for the HP printers are not constant. The weekly demand standard deviation is 30 for Kyle’s Bits and Bytes. Kyle need to know the inventory level and when they need to place order or the reorder point so that there is stock-out. Kyle will lose sales if Kyle is not able to fulfill orders due to stock-out and possible lose future sale. A maximum acceptable probability of stock has be set in any week to 6% by Kyle. Kyle wants to know how many HP laser printer should be in stock and what should be the re-order point with this target.

The inventory level at which orders should be replaced is the reorder point. The demand is variable in this case. It is implicit that demand can be defined by a normal distribution for variable demand. The sum of average daily demand for the number of days in lead time period is the average demand for the lead time. By multiplying average daily demand by the lead time, it can be measured. The variance of the distribution is measured as the sum of daily variance for the number of days in lead time. The reorder point R= dL + z*ơ*√L

d = average daily demand = 200/7 units

L= lead time = 7 days

ơ = standard deviation of daily demand = 30/7

z = number of standard deviations corresponding to the service level probability = 1.56.

The reorder point R = (200/7)*7 + 1.56*(30/7)*√7 = 200 + 17.69 = 217.69. So when inventory level reaches 218 units, Kyle should place an order.

There is a chance of stock-out when demand is variable. During the time of need stock-out can happen. To avoid the risk of stock-out the company needs to maintain safety stock. The additional inventory a firm maintains above expected demand to avoid stock out is the safety stock. To determine safety stock a company use service level. A company chooses what chance it can afford of stock-out. Probability of no stock out during lead time is the service level. This is called the service level. Safety stock is calculated as: safety stock = z*ơ*√L.

L = lead time = 7 days

ơ = standard deviation of daily demand = 30/7

z = number of standard deviations consistent to the service level probability = 1.56

Safety Stock = 1.56*(30/7)*√7 = 17.69 = 18 units. To avoid stock-out on the HP laser printer, Kyle should maintain 18 units of safety stock.

Citation

Black, K. (2017). Business Statistics: For Contemporary Decision Making , (9th Edition). Hoboken, NJ: Wiley.

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Buy Coursework Help
Top Essay Tutor
Instant Assignments
Homework Guru
Quality Homework Helper
Best Coursework Help
Writer Writer Name Offer Chat
Buy Coursework Help

ONLINE

Buy Coursework Help

Hi dear, I am ready to do your homework in a reasonable price.

$62 Chat With Writer
Top Essay Tutor

ONLINE

Top Essay Tutor

I have more than 12 years of experience in managing online classes, exams, and quizzes on different websites like; Connect, McGraw-Hill, and Blackboard. I always provide a guarantee to my clients for their grades.

$65 Chat With Writer
Instant Assignments

ONLINE

Instant Assignments

Hey, I can write about your given topic according to the provided requirements. I have a few more questions to ask as if there is any specific instructions or deadline issue. I have already completed more than 250 academic papers, articles, and technical articles. I can provide you samples. I believe my capabilities would be perfect for your project. I can finish this job within the necessary interval. I have four years of experience in this field. If you want to give me the project I had be very happy to discuss this further and get started for you as soon as possible.

$55 Chat With Writer
Homework Guru

ONLINE

Homework Guru

Hi dear, I am ready to do your homework in a reasonable price and in a timely manner.

$62 Chat With Writer
Quality Homework Helper

ONLINE

Quality Homework Helper

Hi dear, I am ready to do your homework in a reasonable price.

$62 Chat With Writer
Best Coursework Help

ONLINE

Best Coursework Help

I am an Academic writer with 10 years of experience. As an Academic writer, my aim is to generate unique content without Plagiarism as per the client’s requirements.

$60 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Dell r620 technical guide - Domestic and general sky protect phone number - Mini Paper - Criminology - How are new molecules of dna synthesized in living cells - Who published they say i say - 6/222 boronia road boronia - Cessna 172 max crosswind - Subdivide land second life - The following is the adjusted trial balance for stockton company - Cost flow assumptions of weighted-average costs - CJUS 420 DB FORUM 3 2 replies due 9/14/2020 - Read the article and answer the questions - Rotex hot water australia - Dr kazmi st albans - Is for honor dead - Science - Wow little tommy newcomer - Management 13th edition schermerhorn pdf - Come to me michael herry - Potentiometer multisim - Run lola run jump cuts - Paper - How do i complain to macy's - Case study 9-1 - Health care budgeting and financial management for non financial managers - Phys lab - Topic 7 review cwv - Citing multiple chapters in a book apa - Answer questions! - Mafs 912 a rei 3.6 - 7.5 euros in pounds - Sandow birk death of manuel - The espresso lane to global markets case study solution - Why were motte and bailey castles built on hills - Why Amazon is Worth $1 Trillion - Psyk - Electrical tools and equipment and their uses ppt - Australian earth laws alliance - Domenic maisto wanted in ohio - Electron configuration valence electrons - Literature review - Lundbeck korea managing an international growth engine - Videosrus - What is a philosophical question - Salford university campus map - 3120 kj to calories - If a business had sales of $4,000,000 and a margin of safety of 25%, the break-even point was - DB5 - Program Reflection 5 - Cacao bliss powder reviews - Freshwater creek steiner school - Starbucks barista training program - Sinh and cosh relation - Charlie chaplin mime artist - An apology for raymond sebond - Blog Post - Digsilent powerfactory license cost - Assignment - Glasgow royal infirmary audiology - Looking at philosophy donald palmer free download - Differentiation of inverse hyperbolic functions examples - Assigned Problems - 4 - el fin de semana fill in the blanks with words from the list. - Claremont high school academy - Kennedy moon speech transcript - Compute the revised annual depreciation - Variable overhead variance formula - Discussion - Need a Marketing discussing question answered - Genitalia soap note - Topworx d series manual - Music Discussion 2 - My thought whose murder yet is but fantastical technique - Webcachev24 dat - What does bernard marx want - Week 2 homework - Abc model of crisis intervention example - Securecrt tips and tricks - Spam Email - Failure rate fit calculation - Message trace office 365 - Http ondemand blackboard com r91 movies bb91_student_submit_assignment htm - Bill nye rock cycle worksheet - Evaluating training effectiveness in hrm - Toyota strategic management case study - Initiation phase in negotiation - Questions to ask hamlet - Law class Unit 1 discussion - Vicroads b double routes - Art class assignment - Gattaca movie questions biology - Moment 1 hand hygiene - Teaching of psychology - Competitive Strengths Assessment - Describe three of the cobit p09.1 it risk management framework control objectives. - Yvw com au paying - Business analyst life cycle - Identifying Stakeholders - Microbiology case study paper - Week one discussion fund of data systems