Compute the monthly salary payoff table

Assignment Help Operation Management

Reference no: EM13101130

Jim has been employed at Gold Key Realty at a salary of $2,000 per month during the past year. Because Jim is considered to be a top salesman, the manager of Gold Key is offering him one of three salary plans for the next year: (1) a 25% raise to $2,500 per month; (2) a base salary of $1,000 plus $600 per house sold; or, (3) a straight commission of $1,000 per house sold. Over the past year, Jim has sold up to 6 homes in a month. Use Excel to conduct the following analyses:
a. Compute the monthly salary payoff table for Jim. Hint: There are three decision alternatives (salary plans) and seven states of nature (the number of houses sold monthly).

b. For this payoff table find Jim's optimal decision using: (1) the conservative approach, (2) minimax regret approach and (3) the optimistic approach.

c. Suppose that during the past year the following is Jim's distribution of home sales. If one assumes that this a typical distribution for Jim's monthly sales, which salary plan should Jim select? Hint: Use the relative frequency approach to assign probabilities to each state of nature.

Home Sales 0 1 2 3 4 5 6
Number of Months 1 2 1 2 1 3 2

Reference no: EM13101130

Questions Cloud

How long does it take the trooper to overtake speeding car : A car traveling at a constant speed of 21.5 m/s passes a trooper hidden behind a billboard. One second after the speeding car passes the billboard, the trooper sets off in chase with a constant acceleration of 3.10 m/s2. How long does it take the ..

How cyber crime contributed to rise in crime rates : What is meant by cyber crime? How has cyber crime contributed to overall rise in crime rates over last 10 years? What suggestions would you make to combat cyber crime.

What is the net force on the boat : A large boat with a weight of 70000 tons moves at constant speed due west. What is the net force on the boat.

Explain how your action will affect economic growth : Explain how your action will affect economic growth. Explain why it is important to increase economic growth 4. Your rationale for the use of Reserve Requirements.

Compute the monthly salary payoff table : Jim has been employed at Gold Key Realty at a salary of $2,000 per month during the past year. Because Jim is considered to be a top salesman, the manager of Gold Key is offering him one of three salary plans for the next year.

How tall is the lamps image if the lamp is a distance : (a) How tall is the lamp's image if the lamp is a distance of 39.6 cm from the mirror (include sign if negative)? (b) How tall is the lamp's image if the lamp is a distance of 85.8 cm from mirror (include sign if negative)?(c) How tall is the lamp..

Examine an ongoing change initiative involving a group : Examine an ongoing change initiative involving a group, team, organization or country. Has the leader framed the issue in such a way to make it easy for others to take action

Ethical and social issues within the global market of asia : Cultural diversity considerations for the company relative to establishing field offices in Asia.

Theories of leadership and concept of managerial grid : What are the primary differences between Contingency Theories of leadership and the concept of the Managerial Grid? Which theory applies to leadership in the military, civil service, and a cutting-edge small technology firm?

User Account

All Pages