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There are six (6) problems. Follow the directions in each question. Show formulas and all work. The answers need to be in a colored cell (your choice of color) with a border. Format all numbers to 2 decimals and any costs or profits to currency with 2 decimals All problems need to have an explanation of the answer in a text box following the calculations. Write your answers in complete sentences. (Watch your spelling) Questions.xlsx Instructions Tim James sells handcrafted yard decorations at country fairs. The variable cost to make these is $2.50 each, and he sells them for $7.00. The cost to rent a booth at the fair is $145.00. a) How many of these must Tim sell to break even? b) If Tim reduces his variable cost of production to $2.00 per unit, what would the break-even point be? Questions.xlsx Prob 1 Investment Shortage Stable Supply Surplus EMV Hobby Shop -$8,000.00 $15,000.00 $20,000.00 Restaurant $2,000.00 $8,000.00 $6,000.00 Gas Station $6,000.00 $6,000.00 $5,000.00 Probabilities Decision Expected Opportunity Loss Investment Shortage Stable Supply Surplus EOL Hobby Shop Restaurant Gas Station Probabilities Decision Expected Monetary Value STATES OF NATURE Opportunity Loss Table States of Nature Using the following payoff table, use the Decision Making Under Risk Techniques and the following probabilities to determine which of the following investments the local real estate invester should invest in, using the following probabilities: p = 0.30 for a Shortage, p = 0.50 for a Stable Supply, and p = 0.20 for a Surplus. Calculate the EMV, EOL, and EV w/PI if the investor looking at spending $5,000 to do market research. Would the market research worth the cost??? Why?? Questions.xlsx Prob 2 Month DJIA Stock 1 Stock 2 1 11,168.00 32.40 48.50 2 11,150.00 31.70 48.20 3 11,186.00 31.90 44.50 4 11,381.00 36.60 44.70 5 11,679.00 36.70 49.30 6 12,081.00 38.70 49.30 7 12,222.00 39.50 46.10 8 12,463.00 41.20 46.20 9 12,622.00 43.30 47.70 10 12,269.00 39.40 48.30 11 12,354.00 40.10 47.00 12 13,063.00 42.10 47.90 13 13,326.00 45.20 47.80 14 The closing stock price for each of two stocks was recorded over a 12-month period. the closing price for the Dow Jones Industrial Average (DJIA) was also recorded over this same time period. These values are shown in the following table. a) Develop a regression model by running regression to predict the price of stock 1 based on the Dow Jones Industrial Average. Place the regression on a separate Sheet named "Stock 1Reg". What price would Stock 1 be if DJIA was 12,365? (DO NOT USE THE FORECAST FORMULA) b) Which of the two stocks is most highly correlated to the Dow Jones Industrial Average over this time period? c) Do a Trend Analysis Scatterplot with the DJIA? Forecast the DJIA for Month 14? (DO NOT USE THE FORECAST FORMULA) Questions.xlsx Prob 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 A B C D E F G H I J Dante Manufacturing Trend and Seasonality Seasonal Trend Quarterly Year Quarter t Sales 4Q MA CMA Ratio Deasonalized Sales Forecast Forecast 1 1 210.00 2 235.00 3 240.00 4 201.00 2 1 220.00 2 220.00 3 254.00 4 209.00 3 1 205.00 2 226.00 3 261.00 4 210.00 4 1 2 3 4 Seasonal Indexes Quarter 1 2 3 4 Average Forecast Projection for year 4 Trend Model: T = Year Quarter t Trend Forecast Seasonal Index Quarterly Forecast a) Compute seasonal indices for each quarter based on a CMA b) Deseasonalize the data and develop a trend line on the deseasonalized data c) Use the trend line to forecast the sales for each quarter of year 4. d) Use the seasonal indices to adjust the forecasts found in part c. e) Run regression using deseasonalized sales and time to get trend to obtain the final forecasts for periods, 13, 14, 15, 16 Questions.xlsx Prob 4 0.00 50.00 100.00 150.00 200.00 250.00 300.00 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Sales (1000s) Year/Quarter Times Series for Quarterly Sales Sales Deseasonalized data Trend Data Quarterly Forecast Order Size Discount % Price Carrying cost 1-199 0% Price or Cost 200-299 2% Ordering cost 300-399 4% Carrying Cost 400+ 5% Demand The bookstore at State University purchases from a vendor sweatshirts emblazoned with the school name and logo. The vendor sells the sweatshirts to the store for $34 apiece. The cost to the bookstore for placing an order is $108.00, and the carrying cost is 12% of the purchase price. The bookstore manager estimates that 1,400 sweatshirts will be sold during the year. The vendor has offered the bookstore the following volume discount schedule: The bookstore manager wants to determine the bookstore’s optimal order quantity, given the foregoing quantity discount information. 1. Determine carrying cost as a percentage of purchase price 2. With Quantity discounts carrying costs will vary with the the change in price if it computed as a percentage of purchase price 3. Calculate EOQ for each discount price 4. Calculate TC for each EOQ 5. What is the bookstore's optimal order quantity? Questions.xlsx Prob 5 Beaver Creek Pottery company is a small crafts operation run by a Native American tribal council. The company employs skilled artisans to produce clay bowls and mugs with authentic Native American designs and colors. The two primary resources used by the company are special pottery clay and skilled labor. The amount of labor is limited to 40.00 hours per day. The amount of clay available for production each day is 110.00 pounds. Given these limited resources, the company desires to know how many bowls and mugs to produce each day in order to maximize profit. (This is generally referred to as a product mix problem type). Resource Rquirements Labor Clay Profit Product (hr./unit) (lb./unit) ($/unit) Bowl 1 4 35 Mug 2 3 45 Formulate a linear programming model for this problem just like was presented in class. Solve this model by using Solver. Set up Solver just like was presented in class.

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