Probability Expected Return

0.3 -10%

0.4 5%

0.3   15%

If IBM has the probability distribution shown in the table above, what is IBM’s expected return?

What is the EVPI?

please round to 1 decimal point

Describe the Theory of Constraints (TOC). How might the TOC be used to explain operating conditions at a business organization you frequently visit. supermarket, theater, children's school, local gasoline service station.,airport, department store, etc0

The Toylot company makes an electric train with a motor that it claims will draw an average of only 0.8 ampere (A) under a normal load. A sample of nine motors was tested, and it was found that the mean current was x = 1.34 A, with a sample standard deviation of s = 0.49 A. Do the data indicate that the Toylot claim of 0.8 A is too low? (Use a 1% level of significance.)

What are we testing in this problem?

Answer: single proportions.

(a) What is the level of significance?
Answer: 0.01

State the null and alternate hypotheses.

H₀: μ ≠ 0.8; H₁: μ = 0.8

H₀: p = 0.8; H₁: p > 0.8    

H₀: μ = 0.8; H₁: μ ≠ 0.8

H₀: p = 0.8; H₁: p ≠ 0.8

H₀: p ≠ 0.8; H₁: p = 0.8

H₀: μ = 0.8; H₁: μ > 0.8

(b) What sampling distribution will you use? What assumptions are you making?

The standard normal, since we assume that x has a normal distribution with known σ.

The Student's t, since we assume that x has a normal distribution with unknown σ.    

The standard normal, since we assume that x has a normal distribution with unknown σ.

The Student's t, since we assume that x has a normal distribution with known σ.

What is the value of the sample test statistic? (Round your answer to three decimal places.)

(c) Find (or estimate) the P-value.

P-value > 0.250

0.125 < P-value < 0.250

0.050 < P-value < 0.125

0.025 < P-value < 0.050

0.005 < P-value < 0.025

P-value < 0.005

Sketch the sampling distribution and show the area corresponding to the P-value.

(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α?

At the α = 0.01 level, we reject the null hypothesis and conclude the data are statistically significant.

At the α = 0.01 level, we reject the null hypothesis and conclude the data are not statistically significant.   

At the α = 0.01 level, we fail to reject the null hypothesis and conclude the data are statistically significant.

At the α = 0.01 level, we fail to reject the null hypothesis and conclude the data are not statistically significant.

(e) Interpret your conclusion in the context of the application.

Answer: There is sufficient evidence at the 0.01 level to conclude that the toy company claim of 0.8 A is too low.

6. Examples of price discrimination

Complete the following table by indicating whether or not each scenario is an example of price discrimination.

Hint: To determine whether a scenario is an example of price discrimination, think about whether the market can be segmented into two groups that pay different prices for the same good.

Duque Vergere manages a Do or Die Theater complex called Cinema I, II, III, and IV. Each of the four auditoriums plays a different film; the schedule staggers starting times to avoid the large crowds that would occur if all four movies started at the same time. The theater has a single ticket booth and a cashier who can maintain an average service rate of 280 patrons per hour. Service times are assumed to follow an exponential distribution. Arrivals on a normally active day are Poisson distributed and average 210 per hour. To determine the efficiency of the current ticket operation, Duque Vergere wishes to examine several queue-operating characteristics.
e.) What is the probability that there are more than two people in the system? More than three people? More than four?

An analysis of the results of a football team reveals that whether it will win its
next game or not depends on the results of the previous two games. If it won its
last and last-but-one game, then it will win the next game with probability 0.6; if
it won last-but-one but not last game, it will win the next game with probability
0.8; if it did not win the last-but-one game, but won the last one, it will win the
next game with probability 0.4; if it did not win the last-but-one nor the last game,
it will win the next game with probability 0.2. The dynamics of consecutive pairs
of results for the team follows a discrete time Markov chain with state space S =
{(W, W), (L, W), (W, L), (L, L)}, where W and L means the team won and lost
respectively. To simplify the notation put 1 ≡ (W, W), 2 ≡ (L, W), 3 ≡ (W, L) and
4 ≡ (L, L), so that the state space becomes S = {1, 2, 3, 4}.
i. Write down the transition probability matrix for the chain.
ii. Find the mean number of consecutive games the team won

An analysis of the results of a football team reveals that whether it will win its
next game or not depends on the results of the previous two games. If it won its
last and last-but-one game, then it will win the next game with probability 0.6; if
it won last-but-one but not last game, it will win the next game with probability
0.8; if it did not win the last-but-one game, but won the last one, it will win the
next game with probability 0.4; if it did not win the last-but-one nor the last game,
it will win the next game with probability 0.2. The dynamics of consecutive pairs
of results for the team follows a discrete time Markov chain with state space S =
{(W, W), (L, W), (W, L), (L, L)}, where W and L means the team won and lost
respectively. To simplify the notation put 1 ≡ (W, W), 2 ≡ (L, W), 3 ≡ (W, L) and
4 ≡ (L, L), so that the state space becomes S = {1, 2, 3, 4}.
i. Write down the transition probability matrix for the chain.
ii. Find the mean number of consecutive games the team won

CASE STUDY /big 4 Consultants has been appointed by a leading group in hotel industry to prepare feasibility report for opening a five-star hotel in Ras al Khaima. The group had been most successful one in the hotel industry and had always kept its eyes open for new opportunities.

In view of the very fast industrial growth in the city of Ras al Khaima, the city had attracted the attention of the group. It is historically known as Julfar, is one of the seven emirates that make up the United Arab Emirates (UAE). Its name could be taken to mean "headland of the small huts", which can be attributed to the indigenous buildings that existed along the coast. The Emirate is in the northern part of the UAE, bordering Oman’s exclave of Musandum. RAK, apart from being a developing city, has added advantage of pleasant weather and several places of tourist attraction in the neighborhood. Moreover, the closeness to Dubai and Abudhabi, a city of international stature, has made it very easily accessible to international tourists.

For this Consultancy, this was the first time in this area that an assignment concerning hotel industry had been received. They, however, soon realized that the assignment was not as simple as it appeared to be in the first place. The feasibility of such a hotel would depend essentially on two factors. Businessman visiting the city for work would constitute one segment of the market, while tourists would constitute the other. Further, the tourists could be from UAE or foreigners. The success of such a hotel would also depend upon the relative attraction of other tourist centres in the vicinity. Further, it was necessary to estimate fluctuations in demand for hotel accommodation so that attractive discounts could be offered during the off-season for business conferences, executive developmental programmes, etc.

The consultants realized that they would have to undertake a market research on a national scale to assess the tourist potential of the city. They would also have to survey the foreign tourists to estimate one of the most important segments of the market. They wondered whether such a survey will have to extend over a period of one full year to completely take into account the seasonal variations in tourists’ traffic. Moreover, they were undecided about the manner in which survey should be conducted. The company also feared that in absence of an accurate definition of the problem, they may land up surveying the complete tourist market in UAE rather than studying feasibility of a hotel in RAK.

Thus, the problem appeared well defined and that they were concerned as the preliminary report explaining methodology of the research and the questionnaires to be used to be submitted to the client along with the estimate of expenses within one month.

QUESTIONS

1. Apply your ideas in defining the problem of assessing feasibility of hotel in RAK so as

    to help designing the survey.

2. It is important to plan a survey for collecting information on expected demand for

    hotel space. Illustrate.

3. Being the coordinator of this research at Big 4 Consultants, explain various steps you

    would suggest to your research team in preparing the report to the Hotel management.

Case 2 Running Free Dog owners constitute a large target market. Most members share something in common: the desire to let the pet run free and unfettered. If other friendly dogs are nearby and want to play—all the better. The Running Free Dog Park was created to meet this need for owners in the greater Atlanta area. Out-of-home advertising can be the critical component of an IMC program and, in some cases, the primary medium. To help launch the new venture, a local advertising agency created a feeling of expectancy and mystery with a “Running Free Dog Park” campaign. The first billboard displayed a dog tied up with a leash; however, it was only a partial picture. The unfinished nature of the image helps capture interest. Next, the same dog is shown with an unfastened leash and the word “running” appears beneath the pet. In the final billboard, the dog appears unfetters, the leash is gone, and the message “Running Free Dog Park” appears. The billboard displays the services offered, the website address of the park, and the location of the park. In addition to billboards, street kiosks and bus wraps were used to get the message out. Three unleashed dogs in the grass of a park. A dog park can be marketed as a place for pets to run free. The early results of the campaign were positive. Many dog owners became aware of the new park. What followed represented common challenges in marketing communications: sustaining initial interest, moving consumers to action, and building repeat business. In this next phase, dog owners needed to be encouraged to try the facility. They should be led to believe that the price of entry was a value. Then, over time, they can be enticed to make return visits and to offer word-of-mouth referrals to other pet owners. Only if these objectives can be attained will the initial success of the Running Free campaign become validated. 7-48.Define the marketing goals for the second phase of the Running Free Dog Park promotional efforts.

7-49.How would the three-exposure hypothesis or recency theory apply to this advertising program in its initial stages? What about the second campaign after consumers are aware of the dog park?

7-50.Which traditional advertising media should the marketing team use for the second campaign? Discuss the pros and cons of each in terms of the Running Free Dog Park campaign and the desire to stimulate trial usage.

7-51.How could social media and nontraditional media be used to supplement a traditional media campaign in this circumstance?

7-52.Design a newspaper ad and an out-of-home ad that will be placed at Little League baseball parks in the area. Explain why having these two ads in different media is better than having two ads within the same media.

The following given set of data shows a set of 15-minute kW demands for four customers over a 24-hour period. A 25kVA single-phase transformer serves all the customers.

(a) Find the maximum 15-minute demand for each customer and the average 15-minute demand for each customer

(b) Find the total kWh usage and the load factor for each customer.

(c) For the 25kVA transformer, compute the maximum 15-minute coincident demand, the maximum 15-minute non-coincident demand and the load diversity.