## Transcribed Text

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 $108.00,
and the carrying cost is 12% of the purchase price. The bookstore manager estimates that 1,400 sweatshirts will be
sold during the year. The vendor has offered the bookstore the following volume discount schedule:
The bookstore manager wants to determine the bookstoreâ€™s optimal order quantity, given the foregoing quantity discount
information.
1. Determine carrying cost as a percentage of purchase price
2. With Quantity discounts carrying costs will vary with the the change in price if it computed as a percentage of purchase
price
3. Calculate EOQ for each discount price
4. Calculate TC for each EOQ
5. What is the bookstore's optimal order quantity?
Questions.xlsx
Prob 5
Beaver Creek Pottery company is a small crafts operation run by a Native American tribal council. The company
employs skilled artisans to produce clay bowls and mugs with authentic Native American designs and colors. The
two primary resources used by the company are special pottery clay and skilled labor. The amount of labor is
limited to 40.00 hours per day. The amount of clay available for production each day is 110.00 pounds. Given
these limited resources, the company desires to know how many bowls and mugs to produce each day in order to
maximize profit. (This is generally referred to as a product mix problem type).
Resource Rquirements
Labor Clay Profit
Product (hr./unit) (lb./unit) ($/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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