Mary is considering the possibility of opening a small dress shop on Avenue, a few blocks from the university. She has located a good mall that attracts students. Her options are to open a small shop, a medium-sized shop, or no shop at all. The market for a dress shop can be good, average, or bad. The probabilities for these three possibilities are 0.2 for a good market, 0.3 for an average market, and 0.5 for a bad market. The net profit or loss for the medium-sized and small shops for the various market conditions are given in the following table. Building no shop at all yields no loss and no gain.

Alternative	Good Market	Average Market	Bad Market
Small shop	50,000	70,000	-25,000
Medium Sized shop	25,000	55,000	-70,000
No shop	0	0	0

a. Calculate the EMV criterion (2Marks)

b. Prepare the EVPI. (4 Marks)

c. Develop the opportunity loss table for this situation. What decisions would be made using the minimum EOL criterion? (4 Marks)

PART 2. QUEUES. (15 Marks)

Direction: Read, Analyze and Calculate what required.

ABC Furniture store gets an average of 80 customers per shift. The manager of ABC wants to calculate whether she should hire 1, 2, 3, or 4 salespeople. She has determined that average waiting times will be 8 hours with 1 salesperson, 7 hours with 2 salespeople, 6 hours with 3 salespeople, and 5 hours with 4 salespeople. She has estimated the cost per hour that customers wait at $ 10. The cost per salesperson per shift (including benefits) is $150.

	Number of Sales people
	1	2	3	4
(a)Average number of customers per shift
(b) Average waiting time per customer (hours)
(c) Total waiting time per shift (hours)
(d) Cost per hour of waiting time (estimated)
(e) Value of lost time per shift
(f) Salary cost per shift
(g) Total cost per shift

1- Calculate the total waiting time per shift, value of lost time per shift, Salary cost per shift and total cost per shift ( 14 X 1mark = 14 Marks)

2- Use the queues model to determine the number of salespeople should be hired (1 Mark)

PART3. NETWORK MODEL. (10 Marks)

Direction: Read, Analyze and Calculate what required.

Joe, owner of a large horse breeding farm near Orlando, is planning to install a complete water system connecting all of the various stables and barns. The location of the facilities and the distances between them is given in the network shown in the figure below.

Design a network model using the minimal-spanning tree technique to determine the least expensive way to provide water to each facility. (10 Marks)

Summarize your steps in a table showing the:

a. Connected nodes b. Unconnected nodes c. Closest unconnected node d. Arc Selected e. Arc length f. Total Distance