Assignment 1

Question 1
a.) Develop the decision table (EMV)

(0.6) x (15000x25) + (0.4) x (-

315000
EMV for (a) 9000x25)
[10000+(0.6) x+(15000x22)] +
287200
EMV for (b) [10000+(0.4) x (9000x22)]
[30000 +[ (0.6) x (15000x20)]
282000 *
EMV for (c) + [30000+(0.4) x (9000x20)]

Alternative State Of Nature EMV

Without Competition With Competition
a. using present assembly line 375000 225000 315000

b. using current assembly line

340000 208000 287200
after overhauled

c. an entirely new assembly line 330000 210000 282000 *

b.) Develop decision table (EOL)

Alternative State Of Nature EMV

Without Competition With Competition
a. using present assembly line 45000 17000 33800

b. using current assembly line

10000 0 6000
after overhauled

c. an entirely new assembly line 0 2000 800 *

Probabilities 0.6 0.4

Min EOL = Max EMV

Barbour Electric should build an entirely new assembly line because it cost the least for the
production unit overall.
Question 2
Let X = Probability XYZ offers a competing product.
Assuming ABC Co adds an assembly line for the product and
XYZ does not follow gives a profit of RM 300,000

Assuming if they follow with a profit of RM 100,000

Thus, EMV ( Assembly Line)

= 10,000x + 30,000(1-x)

EMV ( New plant addition)

=-100,000x + 600,000(1-x)
10,000x + 30,000(1-x) = -100,000x + 600,000(1-x)
-20,000x + 30,000 = -700,000x + 600,000
680,000x = 570,000
x = 0.838
Question 3
Table 1
Location
1 2 3 4 min 1 2 3 4
W 9 11 7 10 7 W 2 4 0 3
X 10 12 6 12 - 6 = X 4 6 0 6
Y 6 10 13 9 6 Y 0 4 7 3
Z 12 8 11 10 8 Z 4 0 3 2
-
min 0 0 0 2
=
1 2 3 4 1 2 3 4
W 2 3 0 0 Min W 2 4 0 1
X 4 5 0 3 = 1 - X 4 6 0 4
Y 0 3 7 0 Y 0 4 7 1
Z 5 0 4 0 Z 4 0 3 0

W should be allocated to location 2

X should be allocated to location 4
Y should be allocated to location 3
Z should be allocated to location 1
Question 4
1 2 3 supply Net EVAL
A 3 20 6 20 4 40 A3 4-6+3-6 -5.00
B 3 4 30 5 30 B1 3-3+6-4 2.00
C 5 0 3 20 6 10 30 B3 5-6+3-4 -2.00
demand 20 70 10 C1 5-3+6-3 5.00

1 2 3
3 20 6 10 4 10 40 Jumlah Kos
3 4 30 5 30 =60+60+120+90+40
5 0 3 30 6 0 30 370
20 70 10