Questions from Management Science

Q: Starting with the finished version, change the fixed marketing cost to

Starting with the finished version, change the fixed marketing cost to $4000 (really $4 million) in cell B5, and change the decision criterion to “maximize expected utility,” using an exponential util...

Q: Some decision makers prefer decisions with low risk, but this depends

Some decision makers prefer decisions with low risk, but this depends on how risk is measured. As we mentioned in this section, variance is one measure of risk, but it includes both upside and downsid...

Q: Create a two-way SolverTable for the product mix model,

Create a two-way SolverTable for the product mix model, where total profit is the only output and the two inputs are the testing line 1 hours and testing line 2 hours available. Let the former vary fr...

Q: The SweetTooth Candy Company knows it will need 10 tons of sugar

The SweetTooth Candy Company knows it will need 10 tons of sugar six months from now to implement its production plans. The company has essentially two options for acquiring the needed sugar. It can e...

Q: Carlisle Tire and Rubber, Inc., is considering expanding production to

Carlisle Tire and Rubber, Inc., is considering expanding production to meet potential increases in the demand for one of its tire products. Carlisle’s alternatives are to construct a new plant, expand...

Q: A local energy provider offers a landowner $180,000 for

A local energy provider offers a landowner $180,000 for the exploration rights to natural gas on a certain site and the option for future development. This option, if exercised, is worth an additional...

Q: Techware Incorporated is considering the introduction of two new software products to

Techware Incorporated is considering the introduction of two new software products to the market. The company has four options regarding these products: introduce neither product, introduce product 1...

Q: An investor with $10,000 available to invest has the

An investor with $10,000 available to invest has the following options: (1) he can invest in a risk free savings account with a guaranteed 3% annual rate of return; (2) he can invest in a fairly safe...

Q: A buyer for a large department store chain must place orders with

A buyer for a large department store chain must place orders with an athletic shoe manufacturer six months prior to the time the shoes will be sold in the department stores. The buyer must decide on N...

Q: Two construction companies are bidding against one another for the right to

Two construction companies are bidding against one another for the right to construct a new community center building in Bloomington, Indiana. The first construction company, Fine Line Homes, believes...