BUS 306 Quantitative Business Analysis Assignment

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BUS 306 Quantitative Business Analysis Assignment - Emirates College of Technology, UAE

Question 1 - Problem Solving

Given data about company A and company B are provided in the table below:

	Company A	Company B
Fixed Cost	5000	5000
Selling price/Unit	180	200
Cost/Unit	130	175

Solve the following questions:

1. Write down the profit model for both companies A and B.

2. Compute the Breakeven Point for both companies.

3. Which company is more profitable? Explain why.

4. For company A, how many units should the company sell in order to reach a profit of 500$?

5. For company A, what is the total cost from selling 200 units?

6. For company B, what is the profit from selling 250 units?

Question 2 - Problem Solving

A factory wants to improve its service capacity by purchasing a new machine. Three different machines are available. The table below displays the estimated profits for all combinations of decisions with outcomes.

Decisions	States of Nature (Outcomes)
Decisions	High demand	Average demand	Low demand
Purchasing Machine A	$10000	$3000	$-4000
Purchasing Machine B	$6000	$4000	$-2000
Purchasing Machine C	$2000	$500	$0
Probabilities	0.5	0.2	0.3

Questions:

1. In case of uncertainty, apply the Maximax and Maximin criteria to find the corresponding best decision.

2. Use the expected monetary value (EMV) method to find the best decision.

3. A data analytic company proposed to the decision maker certain information about the market condition for $3000. Should the decision maker purchase the information for that price? Explain why.

Reference no: EM132500377

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