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  • Facet Tablet Problem

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    Meet Sanghvi
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    The document discusses a facet tablet supply problem where: 1) The cost per unit decreases as order volume increases, with a selling price that depends on whether the tablets are sold within 3 months. 2) Payoff and regret matrices are provided for different supply and demand scenarios over the next 3-6 months. 3) Using a max-min regret approach, the suggested solution is to order 400 units since it minimizes maximum regret across potential outcomes.

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    Facet problem solution

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    Facet_Tablet_Problem

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    The document discusses a facet tablet supply problem where: 1) The cost per unit decreases as order volume increases, with a selling price that depends on whether the tablets are sold within 3 months. 2) Payoff and regret matrices are provided for different supply and demand scenarios over the next 3-6 months. 3) Using a max-min regret approach, the suggested solution is to order 400 units since it minimizes maximum regret across potential outcomes.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    132 views3 pages

    Facet Tablet Problem

    Uploaded by

    Meet Sanghvi
    The document discusses a facet tablet supply problem where: 1) The cost per unit decreases as order volume increases, with a selling price that depends on whether the tablets are sold within 3 months. 2) Payoff and regret matrices are provided for different supply and demand scenarios over the next 3-6 months. 3) Using a max-min regret approach, the suggested solution is to order 400 units since it minimizes maximum regret across potential outcomes.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    The Facet Tablet Problem

    Cost of facets
    Price per unit
    Order Volume <=300 25000
    Order Volume >300 22000 For all units
    Selling Price 30000 If sold within 3 months Selling Price 20000 If Sold after three months
    Order Size 100

    Payoff Matrix

    Demand within three months


    Supply 0 100 200 300 400 500
    0 0 0 0 0 0 0
    100 -500000 500000 500000 500000 500000 500000
    200 -1000000 0 1000000 1000000 1000000 1000000
    300 -1500000 -500000 500000 1500000 1500000 1500000
    400 -800000 200000 1200000 2200000 3200000 3200000
    500 -1000000 0 1000000 2000000 3000000 4000000

    Regret Matrix
    Demand within three months
    Supply 0 100 200 300 400 500
    0 -500000 500000 1200000 2200000 3200000 4000000
    100 0 0 700000 1700000 2700000 3500000
    200 500000 500000 200000 1200000 2200000 3000000
    300 1000000 1000000 700000 700000 1700000 2500000
    400 300000 300000 0 0 0 800000
    500 500000 500000 200000 200000 200000 0

    Since The Min Max Regret is the best approach to solving deep uncertainities , the suggested solution is buying 400 units
    If Sold after three months

    MaxiMax Payoff MaxiMin Payoffs


    0 0
    500000 -500000
    1000000 -1000000
    1500000 -1500000
    3200000 -800000
    4000000 -1000000

    Here Buying 500 is the suggested approach Here Buying 100 is the suggested approach since it has maximum of t

    Maximum Regret
    4000000
    3500000
    3000000
    2500000
    800000
    500000

    500000
    Since this max regret corresponds to buying 500 units, therefore it is the suggested order quantity

    ution is buying 400 units


    since it has maximum of the minimum payoffs ( Excluding zero as a consideration)

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