Questions and Answers of Managerial Decision Modeling Business Analytics With Spreadsheet

1. List the steps of the decision-making process and describe the different types of decision-making environments.
2. Make decisions under uncertainty and under risk.
3. Use Excel to set up and solve problems involving decision tables.
4. Develop accurate and useful decision trees.
5. Use TreePlan to set up and analyze decision tree problems with Excel.
6. Revise probability estimates using Bayesian analysis.
7. Understand the importance and use of utility theory in decision making.
2 Describe what is involved in the decision-making process.
3 What is an alternative? What is an outcome?
4 Discuss the differences between decision making under certainty, decision making under risk, and decision making under uncertainty.
5 State the meanings of EMV and EVPI.
9 What is the purpose of utility theory?
11 How is a utility curve used in selecting the best decision for a particular problem?
12 What is a risk seeker? What is a risk avoider? How do the utility curves for these types of decision makers differ?Problems
13 In the environment of increased competition, a fitness club executive is considering the purchase of additional equipment. His alternatives, outcomes, and payoffs (profits) are shown in the
16 Debbie Gibson is considering three investment options for a small inheritance that she has just received—stocks, bonds, and money market. The return on her investment will depend on the
22 Waldo Books needs to decide how many copies of a new hardcover release to purchase for its shelves.The store has assumed that demand will be 50, 100, 150, or 200 copies next month, and it needs to
23 After researching the market, Waldo Books (see Problem 21) has concluded that the probabilities of selling 50, 100, 150, and 200 books next month are 0.2, 0.35, 0.25, and 0.2, respectively.(a)
24 A souvenir retailer has an opportunity to establish a new location inside a large airport. The annual returns will depend primarily on the size of the space she rents and if the economy will be
25 An ambulance driver has three major routes from the hospital base station to the university, to which he makes several trips weekly. The traffic patterns are, however, very complex. Under good
27 In Problem 26, you helped a group of medical professionals analyze a decision, using EMV as the decision criterion. This group has also assessed its utility for money: U1- +45,0002 = 0,U1-
29 A manufacturer buys valves from two suppliers. The quality of the valves from the suppliers is as follows:PERCENTAGE DEFECTIVE PROBABILITY FOR SUPPLIER A PROBABILITY FOR SUPPLIER B 1 0.60 0.30 3
32 You have been hired by the No Flight Golf Company, and your first task is to decide whether to market a new golf ball utilizing breakthrough technology and, if so, determine the price. The payoff
33 Your regular tennis partner has made a friendly wager with you. The two of you will play out one point in which you can serve. The loser pays the winner$100. If your first serve is not in play,
36 You are reconsidering your analysis of the tennis wager between you and your partner (see Problem 33) and have decided to incorporate utility theory into the decision making process.The following
39 Shamrock Oil (see Problem 37) has decided to rely on utility theory to assist in the decision concerning the oil field. The following table describes its utility function;all monetary values are
41 Jim Sellers (see Problem 40) has been able to estimate his utility for a number of different values, and he would like to use these utility values in making his decision. The utility values are
43 Jason Scott (see Problem 42) has decided to incorporate utility theory into his decision with his mortgage application. The following table describes Jason’s utility function:MONETARY VALUE
45 Replace all monetary values in Problem 44 with the following utilities:MONETARY VALUE UTILITY$100,000 1.00$ 80,000 0.40$ 0 0.20−$ 20,000 0.10−$ 80,000 0.05−$100,000 0.00(a) What do you
46 The Jamis Corporation is involved with waste management.During the past 10 years it has become one of the largest waste disposal companies in the Midwest, serving primarily Wisconsin, Illinois,
49 Lathum Consulting is an econometrics research firm that predicts the direction of the gross national product(GNP) during the next quarter. More specifically, it forecasts whether the GNP will
50 In the past few years, the traffic problems in Lynn McKell’s hometown have gotten worse. Now, Broad Street is congested about half the time. The normal travel time to work for Lynn is only 15
1. What do you recommend?After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of the Utah Rocky Mountains.As an amateur inventor, Bob was always looking for
2. What is the opportunity loss for this problem?After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of the Utah Rocky Mountains.As an amateur inventor, Bob
3. Compute the expected value of perfect information.After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of the Utah Rocky Mountains.As an amateur inventor,
4. Was Bob completely logical in how he approached this decision problem?After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of the Utah Rocky Mountains.As an
1. Discuss the trade-off curves for cost of waiting time and cost of service.
2. Understand the three parts of a queuing system:the arrival population, the queue, and the service facility.
3. Describe basic queuing system configurations.
4. Understand the assumptions of common queuing models discussed in this chapter.
5. Use Excel to analyze a variety of operating characteristics of queuing systems.
6. Understand more complex queuing systems.
4 Why must the service rate be greater than the arrival rate in a single-server queuing system?
11 From historical data, Harry’s Car Wash estimates that dirty cars arrive at a rate of 10 per hour all day Saturday. With a crew working the wash line, Harry figures that cars can be cleaned at a
12 Rockwell Electronics Corporation retains a service crew to repair machine breakdowns that occur on an average of l = 3 per day (approximately Poisson in nature). The crew can service an average of
18 Sal’s International Barbershop is a popular haircutting and styling salon near the campus of the University of New Orleans. Four barbers work full time and spend an average of 15 minutes on each
21 A local office of the Department of Motor Vehicles(DMV) wishes to overcome the reputation of making citizens wait in line for extremely long times before being able to conduct their business.
22 Julian Argo is a computer technician in a large insurance company. He responds to a variety of complaints from agents regarding their computers’performance. He receives an average of one
34 A technician monitors a group of five computers in an automated manufacturing facility. It takes an average of 15 minutes, exponentially distributed, to adjust any computer that develops a
1. Understand the basic steps of conducting a simulation.
2. Explain the advantages and disadvantages of simulation.
3. Tackle a wide variety of problems by using simulation.
4. Set up and solve simulation models by using Excel’s standard functions.
5. Use the Crystal Ball add-in for Excel to set up and solve simulation models.
6. Explain other types of simulation models.
3 What types of management problems can be solved more easily by using decision modeling techniques other than simulation?
4 What are the major steps in the simulation process?
10 How might drawing a flow diagram help in developing a simulation model?
12 What does Scenario Manager allow you to accomplish in an Excel-based simulation model?
13 Do you think we can use Excel’s Solver to solve simulation models? Why or why not?
15 Edward Owen is responsible for the maintenance, rental, and day-to-day operation of several large apartment complexes on the upper-east side of New York City. Owen is especially concerned about
16 Jay’s Appliances sells micro-fridges according to the monthly demand distribution shown in the table at the top of the next page. Simulate 6 years of demand and compare theoretical and simulated
17 Shawn Bishop, a neuroscience PhD student at Clarksville University, has been having problems balancing his checkbook. His monthly income is derived from a graduate research assistantship;however,
18 Chelsea Truman sells celebrity magazines on Sunday morning in an area surrounded by three busy shopping centers. Demand for the magazines is distributed as shown in the following table:DEMAND
19 The Paris Bakery has decided to bake 30 batches of its famous beignets at the beginning of the day. The store has determined that daily demand will follow the distribution shown in the following
21 Kirkpatrick Aircrafts operates a large number of computerized plotting machines. For the most part, the plotting devices are used to create line drawings of complex wing airfoils and fuselage part
22 A high school guidance counselor has scheduled one-on-one meetings today with 10 seniors to discuss their college plans. Each meeting is scheduled for 20 minutes, with the first meeting set to
23 Dr. Carter Logue practices dentistry in Santa Fe, New Mexico. Logue tries hard to schedule appointments so that patients do not have to wait beyond their appointment time. His October 20 schedule
24 Lee Appliances knows that weekly demand for high-end microwaves is normally distributed, with a mean of 25 units and a standard deviation of 7 units. (In your model use integers for all
25 Mattress Heaven orders a certain brand of mattress from its supplier and sells the mattresses at its retail location. The store currently orders 400 mattresses whenever the inventory level drops
29 Troy’s Tires sells a certain brand tire which has a daily demand that is normally distributed, with a mean of 15 tires and a standard deviation of 4 tires. (In your model use integers for all
30 Ashcroft Airlines flies a six-passenger commuter fight once a day to Gainesville, Florida. A nonrefundable one-way fare with a reservation costs$129. The daily demand for this flight is given in
32 Management of Charlottesville Bank is concerned about a loss of customers at its main office downtown.One solution that has been proposed is to add one or more drive-through teller windows to make
33 Erik Marshall owns and operates one of the largest BMW auto dealerships in St. Louis. In the past 36 months, his weekly sales of Z3s have ranged from a low of 6 to a high of 12, as reflected in
38 A local bank has a single drive-through window with arrival times and service times that follow the distributions from the following table:TIME BETWEEN ARRIVALS(min.)PROBABILITY SERVICE
40 The Diego Street Convenience Store has a single checkout register, with customer arrival distribution shown in the following table:TIME BETWEEN ARRIVALS (min.)PROBABILITY 1 0.18 2 0.20 3 0.22 4
44 A customer service counter at a local bookstore is normally staffed by a single employee. The probabilities of arrival times and service times are shown in the following table:TIME BETWEEN
45 Timberwolves Electric and Wiring Company installs wiring and electrical fixtures in residential construction. Andrew Dickel, the owner of Timberwolves, has been concerned with the amount of time
46 A plant engineering group needs to set up an assembly line to produce a new product. The following table describes the relationships between the activities that need to be completed for this
47 Luna Martinez, director of personnel at Management Resources, Inc., is in the process of designing a program that its customers can use in the job-finding process. Some of the activities include
48 Lamont Henri needs to plan and manage a local construction project. The following table describes the relationships between the activities that need to be completed:ACTIVITY DAYS IMMEDIATE a m b
49 Elena Wilhelm is responsible for developing a comprehensive sales training program for her organization.The following table describes the relationships between the activities that need to be
1. Understand and know when to use various types of forecasting models.
2. Compute a variety of forecasting error measures.
3. Compute moving averages, weighted moving averages, and exponential smoothing timeseries models.
4. Decompose time-series data to identify and analyze trends and seasonality.
5. Identify variables and use them in causal simple and multiple linear regression models.
6. Use Excel to analyze a variety of forecasting models.
1 Briefly describe the steps used to develop a forecasting system.
2 What is a time-series forecasting model?
4 What is a qualitative forecasting model, and when is using it appropriate?
5 What is the meaning of least squares in a regression model?
8 Briefly describe the Delphi technique.
10 Describe how you can use charts to determine whether a forecasting model is valid.
11 What is a correlation coefficient? Why is it useful?
12 Explain how Solver can be used to identify the optimal weights in the weighted moving average model.
14 Jeannette Phan is a college student who has just completed her junior year. The following table summarizes her grade point average (GPA) for each of the past nine semesters:BAGS BAGS YEAR
15 Daily sales volume for Nilgiris Convenience Store is shown in the following table:WEEK SALES WEEK SALES 1 22 7 24 2 27 8 25 3 30 9 22 4 21 10 30 5 33 11 38 6 28 12 37 YEAR SALES 1 480 2 525 3 548
19 Sales of Hot-Blast heaters have grown steadily during the past five years, as shown in the following table:(a) Using exponential smoothing constants of 0.35, 0.65, and 0.95, develop forecasts for
21 The operations manager of a musical instrument distributor feels that demand for bass drums may be related to the number of television appearances by the popular rock group Green Shades during the

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