Year Sales Ft (At - Ft)^2 Ft (At - Ft)^2

1 2.3
2 2.2
3 2 2.25 0.0625 #N/A
4 2.25 2.1 0.0225 2.166667 0.006944 2.25
5 2.6 2.125 0.225625 2.15 0.2025 2.1
6 3 2.425 0.330625 2.283333 0.513611 2.125
7 3.5 2.8 0.49 2.616667 0.780278 2.425
8 4.1 3.25 0.7225 3.033333 1.137778 2.8
9 3.8 3.8 0 3.533333 0.071111 3.25
10 4 3.95 0.0025 3.8 0.04 3.8
11 4.3 3.9 0.16 3.966667 0.111111 3.95
12 4.2 4.15 0.0025 4.033333 0.027778 3.9
13 4.8 4.25 0.3025 4.166667 0.401111 4.15
14 5.2 4.5 0.49 4.433333 0.587778 4.25
15 5 4.733333 4.5
MSE 0.234271 0.352727 5

213
 Moving Average
6
5
4
3 Actual
Value

2 Forecast
1
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Data Point
 Profit
SP 40
CP 30 Number of CoProbability
Scrap 5 9 0.05
10 0.1
11 0.15
12 0.3
13 0.25
14 0.15
1

Payoff Matrix
sup? 9 10 11 12 13 14
dem? A1 A2 A3 A4 A5 A6
0.05 9 E1 90 65 40 15 -10 -35
0.1 10 E2 90 100 75 50 25 0
0.15 11 E3 90 100 110 85 60 35
0.3 12 E4 90 100 110 120 95 70
0.25 13 E5 90 100 110 120 130 105
0.15 14 E6 90 100 110 120 130 140
EMV 90 98.25 103 102.5 91.5 71.75

90 EPPI 120.5 Expected va 17.5

100 Expected payoff of perfect information
110
120
130 EPPI = EMV + EOL
140

Cost
Q A new vending m/c has been installed. The cost of spare parts is as follows

Ordered at 4000
Ordered at 20000

Breakdown 0 1 2 3 4 5
Prob 0.1 0.2 0.3 0.25 0.1 0.05
Payoff
0 1 2 3 4 5

0.1 0 0 4 8 12 16 20
0.2 1 20 4 8 12 16 20
0.3 2 40 24 8 12 16 20
0.25 3 60 44 28 12 16 20
 0.1 4 80 64 48 32 16 20
0.05 5 100 84 68 52 36 20
EMV 44 30 20 16 17 20

0
20
24 EPPI = EMV - EOL
28 8.8 23.2
32
36
 Regret Matrix

0 -25 810 560 310 60

10 0
20 -25
30 -50
40 -75
50 -100

Regret

0
16
32
48
 64
80
35.2 0 0 0 0 0

Regret

0 4 8 12 16 20
16 0 4 8 12 16
32 16 0 4 8 12
48 32 16 0 4 8
64 48 32 16 0 4
80 64 48 32 16 0
EOL 35.2 21.2 11.2 7.2 8.2 11.2
 CP 400 100 Profit
SP 500
Lot Number ofNo. of Days of Demand Scrap Valu 0
2 10 4
3 15 6
4 20 15
5 25 25
6 30 60
7 35 40
8 40 25
9 45 15
10 50 10

Payoff Matrix
Freq Prob 2 3 4 5 6 7 8
4 0.02 2 200 -200
6 0.03 3 200 300
15 0.075 4 200 300
25 0.125 5 200 300
60 0.3 6 200 300
40 0.2 7 200 300
25 0.125 8 200 300
15 0.075 9 200 300
10 0.05 10 200 300
200 EMV 200 290 0 402.5

Regret Matrix
2 3 4 5 6 7 8
2
3
4
5
6
7
8
9
10
EOL 240.5
9 10

9 10
 Payoff Regret
Small Complex Small Complex
0.8 Strong De 8 14 20 Strong De 12 6 0
0.2 Weak Dem 7 5 -9 Weak Dem 0 2 16
EV 7.8 12.2 14.2 EOL 9.6 5.2 3.2

EV w/o PI 14.2 EV w PI 3.2

EV w PI = EV w/o PI + EVPI Profit

EV w PI = EV w/o PI - EVPI Cost

EVPI = |EV w PI - EV w/o PI|

Market Study
P(Fav) 0.77 Strond De 0.94
Weak Dem 0.06
P(Unfav) 0.23 Strond De 0.35
Weak Dem 0.65

EV w/o SI Without Sa 14.2

EV w SI With Sampl 15.93
EVSI 1.73

Sampling Ef= EVSI/EVPI * 100 54%

Best case scenario is -> EVSI = EVPI

Prod A Prod B Avail Only A

Raw Materi 5 3 80 16*45 720
Labour 4 6 100 Only B
Profit 45 30 16.67*30 500.1

Prod A Prod B
Profit 45 30
Qty 10 10 750

Constr. Avail
Raw Materi 5 3 80 <= 80
Labour 4 6 100 <= 100
10 A and B
10*(45+30 750
 Be Smart Feel Smart
Profits 200 250
Changing ce 1 1 Profit 450

P 3 6 9 <= 19
Q 2 2 4 <= 10

u1 u2 u3 y1 y2 y3
Cost 8000 5000 4000 5 4 8
1 1 1 1 1 1 Cost 17017