5) In late last year starting from November 2018, the stock markets in the Wall Street has shown an unexpected level of ups and downs (with almost wiping out 2018 gains in equity market) mainly attributed to the uncertainty caused by Trump’s Trade War policy with China and EU, falling oil prices, and other possible cutting govt. programs (in an effort to reduce budget deficit). In the process, the value of the $ has also shown a high degree of volatility against the Euro, the Yuan (Renminbi), yen and many other major currencies.

A) Given the current condition of the US economy, do you think US policy makers would prefer to see the $ rise in value, decline in value or stay at its current value? Discuss the advantages and disadvantages to the US economy at this time of a stronger vs. a weaker $. Frame your answer in terms of the current Aggregate Demand and Aggregate Supply situation of the US economy. 4pts

B) Draw an AS/AD diagram to illustrate your answers for Question A) above. Clearly label axes and the current position of AS & AD relative to full employment RGDP….also indicate any shifts that would occur if the exchange rate of the $ rose sharply against other major currencies 3pts

The case studies in your course text Operations Management: An Integrated Approach offer glimpses into the real world of business operations, allowing for deeper analysis of issues related to operations management, budgeting, and business strategy.

Read the case "Hightone Electronics, Inc.," which begins on page 24 of your text. Then respond to case questions 1 and 2 on page 25.

Case: Hightone Electronics, Inc.

George Gonzales, operations director of Hightone Electronics, Inc. (HEI), sat quietly at the conference table overlooking the lobby of the corporate head-quarters office in Palo Alto, California. He reflected on the board meeting that had just adjourned and the challenge that lay ahead for him. The board had just announced their decision to start an Internet-based division of HEI. Web-based purchasing in the electronics industry had been growing rapidly. The board felt that HEI needed to offer on-line purchasing to its customers in order to maintain its competitive position. The board looked to George to outline the key operations management decisions that needed to be addressed in creating a successful Internet-based business. The next board meeting was just a week away. He had his work cut out for him.
Hightone Electronics, Inc. was founded in Palo Alto, California over 50 years ago. Originally, the company provided radio components to small repair shops. Products were offered for sale through a catalog that was mailed to prospective customers every four months. The company built its reputation on high quality and service. As time passed, HEI began supplying more than just radio parts, adding items such as fuses, transformers, computers, and electrical testing equipment. The expansion of the product line had been coupled with an increase in the number and type of customers the company served. Although the traditional repair shops still remained a part of the company's market, technical schools, universities, and well-known corporations in the Silicon Valley were added to the list of customers.

Today HEI operates the Palo Alto facility with the same dedication to supplying quality products through catalog sales that it had when it was first founded. Customer service remains the top priority. HEI stocks and sells over 22,000 different items. Most customers receive their orders within 48 hours, and all components are warranted for a full year.

Expanding HEI to include Web-based purchasing seems to be a natural extension of catalog sales that the company already does successfully. George Gonzales agrees that the company has no choice but to move in this competitive direction. However, George does not agree with the opinion of the board that this would be "business as usual." He believes that there are many operations decisions that need to be identified and addressed. As he stated in the meeting, "Having a slick Web site is one thing, but making sure the right product is delivered to the right location is another. Operations is the key to making this happen." His challenge for the next board meeting was to identify the key operations decisions and persuade the board that these issues needed serious consideration.

Case Questions

1. Explain why operations management is critical to the success of a business. Why would developing an Internet-based business require different operations considerations for HEI? Is George Gonzales correct in his assessment that this would not be "business as usual"?

2. Recall that HEI wishes to continue its reputation of high quality and service. Identify key operations management decisions that need to be considered. How different will these decisions be for the Internet business?

A potential drawback of Simple Random Sampling is:

Select one:
a. All possible combinations of individual sampling units can be sampled
b. It may be difficult to assign random numbers to all possible individual sampling units
c. The sample mean may be biased
d. The sample variance may be biased
e. Some individual sampling units may be left out

Which of the following questions would be studied in the area of microeconomics?

-What determines the number of hours an individual works?

-Do interest rates affect net exports?

-Will an increase in government spending cause inflation?

-What portion of total spending comes from households?

-Does hosting the Olympics decrease the unemployment rate?

How do agencies such as Fannie Mae and Freddie Mac allow individual mortgage holders to collectively benefit from the agencies’ access to the capital markets? Does this access result in lower mortgage rates than would otherwise be the case? Are consumers able to have greater access to mortgage opportunities? Why or why not?

Critical thinking exercise 7.4

Do you think a personal health record or other health apps have the power to change an individual’s health behavior? Why or why not?

Critical thinking exercise 7.5

Aside from security concerns, wat reasons might there be for an individual not to create a personal health record?

1. If a floating-rate note has a cap, who can benefit from this feature (the cap)? If it has a floor, who can benefit from the floor? Explain
2. A floating-rate note with $1000 par value makes coupon payments quarterly. The coupon rate is determined by LIBOR plus 28 basis points. Calculate the coupon rates and coupon payment on the following date using the information available.

Based on patient records from the past several years, 12% of the patients who visit the emergency room at Mercy Hospital do not have health insurance.

a. What is the probability that exactly one out of the next seven random patients who visit the emergency room at Mercy Hospital will not have health insurance?

Do not round intermediate calculations. Round your answer to four decimal places.

Probability =

b. What is the probability that two or more out of the next seven random patients who visit the emergency room at Mercy Hospital will not have health insurance?

Round intermediate probabilities to four decimal places. Do not round any other intermediate calculations. Round your answer to four decimal places.

Probability =

c. On average, how many out of every 25 random patients who visit the emergency room at Mercy Hospital will not have health insurance?

Round your answer to two decimal places.

Average number = patients