quantitative analysis

Holga Inc. is a supplier of chemicals and equipment that are used by Hollywood to process movie films. One chemical that FCI supplies is BC-6. Megan John, president of the company wants to expand the company's facilities to meet the increasing demand of the film industry. Financial Data The total production cost for each case of BC-6 is $ 125, and for each case that FCI sells, it makes a profit of $20. If each facility produces more than what the market requires, the production is stored at $35.00 per case. The expansion facilities will produce up to their maximum capacity. The company has committed to satisfy the market demand up to its full production capacity at each of its facilities. Options and Market Demand Facilities Daily Capacity (Cases) FAC 3 3,200 Daily Market Demand (Cases FAC 1 3,100 3,200 3, 100 3,000 2,900 2,800 FAC 2 3,000 Probability 10. 10 0.25 0.25 0.25 0. 15 Since BC-6 is a proprietary product, the company can only meet the market demand up to its full production capacity. Megan John, a veteran in the films chemicals business has made the company one of the largest companies by implementing conservative policies aiming at minimizing business payoffs and wants to continue with this approach for this project as well, Megan John hired you as the project manager, and you must recommend what type of expansion facility to build. Based on the above information: 1. Estimate the decision (payoff) table for this problem. (30 Marks) 2. How much is the perfect forecast of the market demand worth? (5 marks) 3. Criterion: Minimax Regret (5 marks) a. What do you recommend? b. What will be the payoff value? 4. Criterion. Expected opportunity loss (6 marks) a. What do you recommend? b. What will be the payoff value