Reference no: EM132310022
Maritime and Logistics Management
On completion of this unit you should be able to:
1. Implement advanced skills to collect, analyse and interpret data when addressing complex decision problems emerging in logistics management
2. Apply intelligent techniques and advanced reasoning skills for knowledge discovery in support of real-life decision problems with focus on logistics optimization
3. Investigate and assess the different business analytics solutions and their applicability to a variety of decision-making requirements in diverse contexts
4. Deconstruct professional judgements and justify recommendations through corroborating evidence or critical thinking
ASSIGNMENT : DECISION CASES
Task description & requirements
Task 1
Aidan Construction is bidding against Bode Construction for a project. Aidan believes that Bode’s bid is a random variable B with the following mass function: P(B=$6,000)=40%, P(B=$8,000)=30%, P(B=$11,000)=30%. It will cost Aidan $6,000 to complete the project.
Assume that in case of equal bids, Aidan wins the bidding.
a. Construct the decision table for the problem.
b. Use the maximin, minimax, maximax, Laplace and Hurwicz-α (for the latter method you need to identify your α index and justify it) criteria to determine Aiden’s bid.
Task 2
Qasar Co. distributes wireless routers to Internet service providers. The purchase price per item from the supplier is $75 and the selling price to customers is $125. Monthly demand for the router is a normal random variable with a mean of 100 units and a standard deviation of 20 units. Qasar wants to maintain an inventory level up to 100 routers. So, at the beginning of each month it orders enough routers to comply with this requirement.
If the monthly demand is less than 100, each router that was left costs Qasar $15. There is no option for Qasar to restock more than once in a month. Qasar assigns a shortage cost of $30 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its
customers. You are the manager of Qasar and you would like to use a simulation model to analyze this situation.
a. What is the average monthly profit resulting from Qasar’s policy of stocking 100 routers at the beginning of each month?
b. In how many months is demand completely satisfied?
c. Use the simulation model to compare the profitability of monthly replenishment levels of 100, 120, and 140 routers. Use the corresponding 95% confidence intervals on the average profit to make your comparison.
Task 3
A business initiative of Exacta Ltd. has the potential to generate either losses of up to $75 000 at the end of the year or profits of up to $250 000. You are a decision analyst working with Exacta Ltd. and for the sake of deciding whether to undertake this business initiative you need to construct the utility function of the general manager of Exacta Ltd. over the potential profits.
Describe a detailed dialog with the general manager of Exacta Ltd. to elicit one of the utility quantiles over profits (the lecturer will assign the quantile index to be explored by each student for this task during the module 8 lecture).
You are expected to clearly and explicitly describe the solutions and approaches you use to solve the tasks. Where needed, provide references. You are also allowed to use computational environments (e.g. Excel, Matlab, R, etc.) to conduct data analysis, calculation and simulations. If so, please provide your source files along with your submission. See the Essay/report assessment criteria sheet on the following page for information about the criteria and the standards by which your work will be judged.