3-2 online - Quantitative Analysis Q1 (6.5) Marks Assume your family ask you to invest some of their money in a project. Your problem is to decide which type of projects you would invest in. There are four opportunities in front of you. Either to invest in Project A, Project B, Project Cor Project D. The annual return from any of these alternatives depends on a few marketing factors related to the demand for these projects. Assume that your marketing department provided you the following information: Investment Alternatives Market Status Very Promising Promising Fair Poor AED 000 000AED 000AED 000 AED Project A 3500 2600 800 (- 400) Project B 2400 1800 600 250 Project C 1600 1000 300 (- 200) Project D 900 800 200 (-100) Probability 0.20 0.25 0.30 0.25 As a Business Analyst, what would be your optimal decisions based on each of the following decision Criterion? a. Maximax and Maximin (1 Mark) b. Criterion of realism, assume that your coefficient of realism value is 0.75 (1.5 Marks) Develop the Opportunity Loss table and state your decisions based on: (3 Marks) i. Expecting Opportunity Loss (EOL) using EMV ii. Minimax Regret d. Discuss your results based on the criterion a to o used. (1 Mark) C. R H 3 N . CER 303-2 online - Quantitative Analysis (3.3) Marks Q.2 A small Company provides different types of services for the community. Due to technological advancement the company is seeking the replacement of its equipment. The company received proposals from different vendors. They proposed for each equipment a monthly lease cost plus a cost for each service they provide. For the First equipment: a monthly lease cost of AED 9,150, and there is a variable cost of AED 150 per service provided. For the second equipment: a monthly lease cost of AED 12,400, and there is a variable cost of AED 100 per service provided. Customers are charged AED 300 per service provided. a) Compute the break-even point and revenue for each equipment? (Mark) b) Compute the volume (the number of services) at which both equipment have the same monthly total cost? (Mark) y provided 200 services using second equipment with the selling price per service reduced to AED 280, and the fixed cost increased to AED 13000. (Mark) Compute the variable per service provided by first equipment Compute the revenue for this case d) Which equipment do you propose and why? (0.5 Mark) c) If the company 7 " B I E % S's 6 X 0 H L f B N M
