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1) Mrs. Marilyn Finch is planning on investing in stocks. She is considering three different types stocks, ChevRom, ExRom, and TexRom to choose from under two possible states, good and bad. As a result of favorable stock market conditions, there is a 0.7 probability of good and 0.3 probability of bad state. The table below indicates the profits and losses of investing in the following three stocks under the given states-good and bad.
STOCKS GOOD (0.7) BAD (0.3)
ChevRom $70,000 $10,000
ExRom $95,000 -$35,000
TexRom $40,000 $30,000
Set up a spreadsheet to find the best decision using:
a) Maximax.
b) Maximin.
c) Equal likely.
d) Expected value.
2) LongTailPublication.com, a small online publisher, is considering buying a firewall for its website. The cost of the firewall is $20,000. There is an 80% chance that the site will not be hacker attacked during the life of the firewall, a 12% chance of a minor attack occurring resulting in $24,000 in damage, and an 8% chance of a major attack occurring resulting in $140,000 in damage. Use Table below for analysis.
a) Compute the expected damage due to hacker attack.
b) Compare the expected damage and cost of firewall ($20,000) and recommend if to purchase firewall.
c) Would you recommend purchasing the firewall at cost of $10,000?
d) Discuss the risks involved with basing the decision strictly on expected cost.
Severity of HackDamage (X)Probability P(X)
No Hack00.80
Minor Hack$24,0000.12
Major Hack$140,0000.08
3) Sanford and sons are planning to invest in advertising to sell three of their products. There are three different outcomes: A sells the most, B sells the most, or C sells the most. Two possible states exist, good and bad. The table below indicates the profits and losses of investing in the advertising of the three products under given states-good and bad. Construct an Excel spreadsheet to answer the following:
PRODUCT GOOD (0.6) BAD (0.4)
A $5.5 million $0.5 million
B $3.5 million $2.5 million
C $6.5 million -$3.5 million
a) Determine which product they should invest in this year based on maximizing expected value.
b) Create a sensitivity graph comparing the different alternatives as the probability of Good changes.
4) Ferry Holmes has been thinking about starting his own independent gasoline station. Ferry’s problem is to decide how large his station should be. The annual returns will depend on both the size of the station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Ferry developed the following table:
SIZE OF FIRST STATION GOOD MARKET MODERATE MARKET POOR MARKET
Small $60,000 $20,000 $10,000
Medium $80,000 $40,000 -$10,000
Large $120,000 $30,000 -$30,000
Very Large $250,000 $35,000 -$170,000
Probability 0.50 0.30 0.20
Set up a spreadsheet to find the best decision using:
a) Maximax.
b) Maximin.
c) Equally likely.
d) Expected value.
e) Minimax Regret.
Chapter 6 homework
1- The number of bottles of water sold in a machine each day is recorded below:
DAY 1 2 3 4 5 6 7 8 9 10 11 12
Bottles Sold 126 83 90 102 108 106 119 100 93 102 103 123
DAY 13 14 15 16 17 18 19 20 21 22 23 24
Bottles Sold 89 104 138 88 90 83 82 103 109 156 138 106
f) Using Excel, find the equation of best linear trend line that fits the data using Excel Regression function. Make sure to find the residuals output.
g) Use the trend line to make forecast for periods 25,26, and 27.
h) Observe the value of R-squared and interpret.
i) Using the values of residuals, find MAD.
2- An accountant at the firm Gober Anderson, Arthur believed that several traveling executives were submitting unusually high travel vouchers when they returned from business trips. Arthur took a sample of 300 vouchers submitted from the past year. Then he developed the following multiple regression equation relating expected travel cost (Cost) to number of days on the road (Days) and distance traveled (Distance) in miles:
Cost = $110.00 + $52.30 Days + $0.55 Distance
The coefficient of correlation computed was 0.74.
j) If Ken Lay returns from a 350-mile trip that took him out of town for 7 days, what is the expected amount he should claim as expenses (use the regression equation to predict this value)?
k) Ken submitted a reimbursement request for $1012. Based on model above, is this amount reasonable? Explain.
l) Should any other variables be included? Which ones? Why?
3- Consider the following data on demand (in 10,000) of bars of soap. The independent variables are Time Period (PERIOD), Price, Average Industry Price (AIP), and Advertising (in $1000). We are interested in building different models to forecast demand.
m) Using Excel, construct the correlation matrix and interpret (relation of all variables with demand). Rank variables based on degree of absolute values of correlation with Demand.
n) Using Excel linear regression analysis, find the Trend line to predict demand based on Time Period. Observe R-squared value and Significant F and interpret.
o) Construct multiple linear regression model using all independent variables to predict Demand (Y). Provide the equation and interpretation of R-squared, Significant-F.
p) Based on P-values of independent variables, rank the variables based on degree of contribution to the model. Hint: The lower the P-value, the higher the significance of a given variable.
q) Use the equation in part (c) to forecast demand for September 2023 if Price = $3.90, AIP = $4.25, and
ADV= $7.3.
Copy and paste the data below in an Excel file for analysis.
Month/Yr. PERIOD PRICE AIP ADV DEMAND
March 2021 1 3.85 3.8 5.5 7.38
  2 3.75 4 6.75 8.1
  3 3.7 4.3 7.25 9.52
  4 3.7 3.7 7.5 9.2
  5 3.6 3.85 7 9.33
  6 3.6 3.8 6.5 8.28
  7 3.6 3.75 6.75 8.2
  8 3.8 3.85 5.25 7.87
  9 3.8 3.65 5.25 7.1
  10 3.85 4 6 8
Jan. 2022 11 3.9 4.1 6.5 7.89
  12 3.9 4 6.25 8.15
  13 3.7 4.1 7 9.1
  14 3.75 4.2 6.9 9.26
  15 3.75 4.1 6.8 9.5
  16 3.8 4.1 6.8 9.72
  17 3.7 4.2 7.1 9.26
  18 3.8 4.3 7 9
  19 3.7 4.1 6.8 8.75
  20 3.8 3.75 6.5 7.95
  21 3.8 3.75 6.25 7.65
  22 3.75 3.65 6 8.3
Jan. 2023 23 3.7 3.9 6.5 9.2
  24 3.55 3.65 7 9.5
  25 3.6 4.1 6.8 9.75
  26 3.65 4.25 6.8 10.21
  27 3.7 3.65 6.5 9.27
  28 3.75 3.75 5.75 8.67
  29 3.8 3.85 5.8 8.45
Aug. 2023 30 3.7 4.25 6.8 8.2
Sep. 2023 31
Chapter 7 homework
1- Using the data in following table,
MONTH SALES
January 908
February 1235
March 804
April 1019
May 1151
June 1383
July 894
August 1255
September 1087
October 1382
November 957
December 1254
a) Compute a 3-month moving forecast of Sales from April through December and for the next month, January. Compute the MAD for the forecast.
b) Compute a 6-month moving forecast of Sales from July through December and for the next month, January. Compute the MAD for the forecast.
c) Compute a weighted 3-month moving forecast of Sales from April through December and for the next month, January, using weights of 0.50 (most recent data), 0.30, and 0.20 (most distant data). Compute the MAD for the forecast.
D) Compare the forecasts you computed by using moving forecast model from part a, b, and c. Which forecasting model does a better job?
2- Using the data from problem 1,
A) Compute an exponentially smoothed forecast with alpha= 0.80 through December and create a forecast for the next month, January. Use initial forecast of 908 for January.  Find MAD.
B) Compute an exponentially smoothed forecast with alpha= 0.60 through December and create a forecast for the next month, January. Use initial forecast of 908 for January. Find MAD.
C) Compare the forecasts you computed by using an exponential smoothing model from part a and b. Which forecasting model does a better job?
3- Quarterly gas usage in MCF is shown below.
SEASON USAGE
Year 2020 2021 2022
Fall 1091 1071 1104
Winter 1138 1161 1146
Spring         966 912   903
Summer 831 830   825
A) What are the seasonal indices for the four seasons?
B) Find the de-seasonalized values of the above gas usages.
4- Passenger miles, in thousands flown, on Commuter Odessa Express Airlines, a commuter firm serving the Midland TX, are shown for the past 12 weeks.
Week 1 2 3 4 5 6 7 8 9 10 11 12
Miles Flown
1000’s 14 25 13 22 16 18 25 18 23 22 17 26
A) Assuming forecast value of 16 for week 1, use Excel to find exponential forecasts miles for weeks 2 through 13 using alpha = 0.6. Calculate MAD for this model.
B) Redo part (a) using alpha = 0.90.
C) Which forecasting model is better? Why?
5- Attendance at Old-Time Spring, Bonnie and Clyde attraction, has been as follows:
QUARTER ATTENDEES 1000’S
Spring ‘20 10.4
Summer ‘20 16.8
Fall ‘20 7.4
Winter ‘20 6.5
Spring ‘21 8.2
Summer ‘21 12.4
Fall ‘21 5.2
Winter ‘21 8.9
Spring ‘22 14.6
Summer ‘22 20.5
Fall ‘22 9.8
Winter ‘22 7.3
A) Compute seasonal indices for this data.
B) Find the de-seasonalized values and construct a linear graph of both data over time.

Sample Answer

Compelling correspondence is essential to the achievement all things considered but since of the changing idea of the present working environments, successful correspondence turns out to be more troublesome, and because of the numerous impediments that will permit beneficiaries to acknowledge the plan of the sender It is restricted. Misguided judgments.In spite of the fact that correspondence inside the association is rarely completely open, numerous straightforward arrangements can be executed to advance the effect of these hindrances.

Concerning specific contextual analysis, two significant correspondence standards, correspondence channel determination and commotion are self-evident. This course presents the standards of correspondence, the act of general correspondence, and different speculations to all the more likely comprehend the correspondence exchanges experienced in regular daily existence. The standards and practices that you learn in this course give the premise to additionally learning and correspondence.

This course starts with an outline of the correspondence cycle, the method of reasoning and hypothesis. In resulting modules of the course, we will look at explicit use of relational connections in close to home and expert life. These incorporate relational correspondence, bunch correspondence and dynamic, authoritative correspondence in the work environment or relational correspondence. Rule of Business Communication In request to make correspondence viable, it is important to follow a few rules and standards. Seven of them are fundamental and applicable, and these are clear, finished, brief, obliging, right, thought to be, concrete. These standards are frequently called 7C for business correspondence. The subtleties of these correspondence standards are examined underneath: Politeness Principle: When conveying, we should build up a cordial relationship with every individual who sends data to us.

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It is a unique cycle that oversees force, closeness and limits, cohesiveness and flexibility of route frameworks, and makes pictures, topics, stories, ceremonies, rules, jobs, making implications, making a feeling of family life An intelligent cycle that makes a model. This model has passed ages. Notwithstanding the view as a family and family automatic framework, one of the greatest exploration establishments in between family correspondence centers around a family correspondence model. Family correspondence model (FCP) hypothesis clarifies why families impart in their own specific manner dependent on one another ‘s psychological direction. Early FCP research established in media research is keen on how families handle broad communications data. Family correspondence was perceived as an exceptional scholastic exploration field by the National Communications Association in 1989. Family correspondence researchers were at first impacted by family research, social brain science, and relational hypothesis, before long built up the hypothesis and began research in a family framework zeroed in on a significant job. Until 2001, the primary issue of the Family Communication Research Journal, Family Communication Magazine, was given. Family correspondence is more than the field of correspondence analysts in the family. Examination on family correspondence is normally done by individuals in brain science, humanism, and family research, to give some examples models. However, as the popular family correspondence researcher Leslie Baxter stated, it is the focal point of this intelligent semantic creation measure making the grant of family correspondence special. In the field of in-home correspondence, correspondence is normally not founded on autonomous messages from one sender to one beneficiary, yet dependent on the dynamic interdependency of data shared among families It is conceptualized. The focal point of this methodology is on the shared trait of semantic development inside family frameworks. As such, producing doesn’t happen in vacuum, however it happens in a wide scope of ages and social exchange.

Standards are rules end up being followed when performing work to agree to a given objective. Hierarchical achievement relies significantly upon compelling correspondence. So as to successfully impart, it is important to follow a few standards and rules. Coming up next are rules to guarantee powerful correspondence: clearness: lucidity of data is a significant guideline of correspondence. For beneficiaries to know the message plainly, the messages ought to be sorted out in a basic language. To guarantee that beneficiaries can without much of a stretch comprehend the importance of the message, the sender needs to impart unmistakably and unhesitatingly so the beneficiary can plainly and unquestionably comprehend the data.>

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