Fix And Repair A Corrupted Excel File
| QUESTION 10 | Slaggert Systems is considering becoming certified to the ISO 9000 series of quality standards. . | |||||||||||||||
| Becoming certified is expensive, but the company could lose a substantial amount of business if its major customers suddenly demand ISO certification and the company does not have it. . | ||||||||||||||||
| At a management retreat, the senior executives of the firm developed the following payoff table, indicating the net present value of profits over the next five years.. | ||||||||||||||||
| Customers’ Response | ||||||||||||||||
| Decision | Standards Required | Standards Not Required | Probabilities | |||||||||||||
| Become certified | $82,000 | $63,000 | Standards Required | Standards Not Required | ||||||||||||
| Stay uncertified | $80,000 | $72,500 | 0.41 | 0.59 | ||||||||||||
| Part 1 | Identify the type of decision problem and use excel formulas and functions to determine the following calculations. | |||||||||||||||
| Best and Worst Payoffs | Opportunity-Losses | |||||||||||||||
| Minimum | Maximum | Standards Required | Standards Not Required | MAX | ||||||||||||
| Type of decision problem | Become certified | Become certified | ||||||||||||||
| What are the payoffs ? | Stay uncertified | Stay uncertified | ||||||||||||||
| Part 2 | What decision should the company make using each of the following strategies ? | |||||||||||||||
| a. Decision using Aggressive strategy | with Payoff value = | which is the | value among the | outcome values of the alternatives considered | ||||||||||||
| b. Decision using Conservative strategy | with Payoff value = | which is the | value among the | outcome values of the alternatives considered | ||||||||||||
| c. Decision using Opportunity-Loss strategy | with opportunity loss = | which is the | value among the | opportunity losses of the alternatives considered | ||||||||||||
| Part 3 | Compute the standard deviation of the payoffs for each decision. What does this tell you about the risk in making the decision? | |||||||||||||||
| a. Std Deviation of Payoffs for becoming certified | ||||||||||||||||
| b. Std Deviation of Payoffs for staying uncertified | ||||||||||||||||
| c. Which Decision has Greater Risk ? | ||||||||||||||||
| Part 4 | What decision should be made using the Average payoff strategy ? | |||||||||||||||
| a. Average of Payoffs for becoming certified | ||||||||||||||||
| b. Average of Payoffs for staying uncertified | ||||||||||||||||
| c. Decision using Average Payoff strategy | ||||||||||||||||
| Part 5 | Use the probabilities given on the problem statement section to determine what decision should be made using the Expected Value strategy | |||||||||||||||
| a. Expected Value for becoming certified | ||||||||||||||||
| b.Expected Value for staying uncertified | ||||||||||||||||
| c. Decision using Expected value strategy | ||||||||||||||||
