(a)
Interpretation:
It is required to determine the two future states of nature the A Hotel faces.
Concept Introduction:
In many countries, hotels have evolved as extensions of the domestic hospital. The nature of the product in the hotel industry also determines that most units will be a small major objective in the face of opposition.
(a)
Explanation of Solution
Given information:
The A Hotel has the
The two future states of nature A Hotel are as follows:
- All those customers who have reservations shown up and the 56 rooms are occupied then there are no dissatisfied customers.
- But the one customer who has the reservations will show up the resulting in 55 rooms are being occupied. And the one-room is vacant, thus, there are no dissatisfied customers.
(b)
Interpretation:
The expected value of accepting the exactly
Concept Introduction:
In many countries, hotels have evolved as extensions of the domestic hospital. The nature of the product in the hotel industry also determines that most units will be a small major objective in the face of opposition.
(b)
Explanation of Solution
Given information:
The A Hotel has the
It is given that the probability
Calculate the expected value of the profits of accepting exactly
Thus, the expected value of accepting the exactly
(c)
Interpretation:
The expected value of accepting the exactly
Concept Introduction:
In many countries, hotels have evolved as extensions of the domestic hospital. The nature of the product in the hotel industry also determines that most units will be a small major objective in the face of opposition.
(c)
Explanation of Solution
Given information:
The A Hotel has the
There is a
It is given that the probability
The probability
Calculate the expected value of the profits of accepting exactly
Thus, the expected value of accepting the exactly
(d)
Interpretation:
It is required to determine that A Hotel will say yes or no, if the A Hotel already has
Concept Introduction:
In many countries, hotels have evolved as extensions of the domestic hospital. The nature of the product in the hotel industry also determines that most units will be a small major objective in the face of opposition.
(d)
Explanation of Solution
Given information:
The A Hotel has the
The A Hotel should accept for the following reasons:
The expected value
Therefore, the A Hotel will say yes to the new customer.
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Chapter 15 Solutions
Practical Operations Management
- At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is 100, 90, 50, or 10, respectively. After observing the condition of the machine at the beginning of the week, the company has the option, for a cost of 200, of instantaneously replacing the machine with an excellent machine. The quality of the machine deteriorates over time, as shown in the file P10 41.xlsx. Four maintenance policies are under consideration: Policy 1: Never replace a machine. Policy 2: Immediately replace a bad machine. Policy 3: Immediately replace a bad or average machine. Policy 4: Immediately replace a bad, average, or good machine. Simulate each of these policies for 50 weeks (using at least 250 iterations each) to determine the policy that maximizes expected weekly profit. Assume that the machine at the beginning of week 1 is excellent.arrow_forward7. Assume that there is a 9% rate of disk drive failure in a year. a. If all your computer data is stored on a hard disk drive with a copy stored on a second hard disk drive, what is the probability that during a year, you can avoid catastrophe with at least one working drive? b. If copies of all your computer data are stored on three independent hard disk drives, what is the probability that during a year, you can avoid catastrophe with at least one working drive? a. With two hard disk drives, the probability that catastrophe can be avoided is nothing. (Round to four decimal places as needed.)arrow_forwardAssume that a company is considering buying a new piece of equipment for $240,000 that would have a useful life of five years and no salvage value. The equipment would generate the following estimated annual revenues and expenses: Commissions Insurance Revenues $ 112,400 Less operating expenses: $ 15,000 5,000 48,000 30,000 98,000 $ 14,400 Depreciation Maintenance Net operating income Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. The internal rate of return for this investment is closest toarrow_forward
- a bread manufacturer relies on maintenance employees to keep its rather quite old production equipment for their operation. Whenever the equipment breaks down, the maintenance team is able to repair the equipment quickly. However, they are less effective at avoiding these breakdowns and cannot predict when the equipment will break down. The maintenance group has modified the equipment over the years and, in any event, the manufacturer of the equipment is no longer in business. The maintenance employees teach each other how to repair the equipment, but have refused to document any of this information (saying that it is too difficult to document these details). The company owner has thought about firing the maintenance staff unless they document the maintenance procedures, but realizes that there is no one else who can repair the equipment. Discuss or explain the sources or types of power and contingencies (moderator) of power among the maintenance employees in this situation.arrow_forwardA Florida lottery machine and printer at Store #8302 operates 360 days a year. If the machine does not work and breaks down, it costs the Florida Lottery Commission $2,160 per day. If store employees are trained to perform local tests on the machine each day plus the costs of machine repairpersons, these preventive maintenance costs average $850 per day. If preventive maintenance is performed daily, the probability the equipment fails is zero. The probability of store lottery machine breakdown is as follows. Number of Lottery Machine Breakdowns per Day 0 1 1/3 Probability of a breakdown What are the economics of the situation? Do not round intermediate calculations. Round your answers to the nearest dollar. The expected cost of a breakdown per day is $ The Florida Lottery Commission saves $ by performing preventive maintenance daily. 2 1/3 1/3 per yeararrow_forwardA rural cooperative purchased a trencher at a cost of P230,500.00. It is estimated that the trencher will have a salvage value of P25,000.00 after digging 300,000 meters of irrigation canals. Determine the book value of the trencher after two years, if it was used to dig 50,000 meters on the first year and 75,000 meters on the second year. (Ans. P144,875.00)arrow_forward
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- Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that there is a probability of 0.35 that the ATR Co. will come out with a competitive product. If Weiss adds an assembly line for the product and ATR Co. does not follow with a competitive product, Weiss's expected profit is $50,000; if Weiss adds an assembly line and ATR follows suit, Weiss still expects $20,000 profit. If Weiss adds a new plant addition and ATR does not produce a competitive product, Weiss expects a profit of $600,000; if ATR does compete for this market, Weiss expects a loss of $120,000. a) Expected value for the Add Assembly Line option = $ $ 39500 (enter your answer as a whole number). Expected value for the Build New Plant option = $ (enter your answer as a whole number). %3Darrow_forwardHoward Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that there is a probability of 0.35 that the ATR Co. will come out with a competitive product. If Weiss adds an assembly line for the product and ATR Co. does not follow with a competitive product, Weiss's expected profit is $50,000; if Weiss adds an assembly line and ATR follows suit, Weiss still expects $20,000 profit. If Weiss adds a new plant addition and ATR does not produce a competitive product, Weiss expects a profit of $600,000; if ATR does compete for this market, Weiss expects a loss of $120,000. a) Expected value for the Add Assembly Line option = S (enter your answer as a whole number).arrow_forwardLily believed that a prospective insured's building might be considered a highly protected risk. Which one of the following buildings is most likely to be considered a highly protected risk? A small building located in the middle of a very rural area A masonry noncombustible industrial complex that relies on its own water supply An office building without any public fire protection A large fire-resistive building with automatic sprinkler systemsarrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,