PT. Corona is currently trying to determine the size of the computer system which will provide optimal cost consequences when using the leasing method. The results of each decision choice and acceptance of the business situation (high and low) are summarized in the following table. Situation: Reception High $ 300,000 $ 200,000 $ 100,000 Low -$ 15,000 $ 20,000 $ 60,000 Alternative decisions Great leasing system Medium system leasing Small leasing system The director of this company wants to know which decision is best based on several approaches, namely a) approach optimistic, b) approach conservative, c) approach minimax-regret. Help the Director find the answer.
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- Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. Ethical decisions that affect a buyers ethical perspective usually involve the organizational environment, cultural environment, personal environment, and industry environment. Analyze this scenario using these four variables.Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What does the Institute of Supply Management code of ethics say about financial conflicts of interest?Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What should Sharon do in this situation?
- A 99-unit apartment building that was acquired for $2.7 million generates a 7.5% before tax annual return on equity with a $1.5 million 10-year interest-only first mortgage loan at a 5.0% annual interest rate. What is the debt service coverage ratio on the loan? 2.2 1.83 0.54 2.7You work for the Brad's Nailer Company which manufactures three types of nailers: a pneumatic model, the "ProLine", and a cordless model. You have contracted to supply a national retail chain with all three models of nailers. However, Brad's nailer production capability is limited in three departments: production, testing, and packaging. The goal is to maximize your revenue. Your answer will be the number packaging hours to be produced (The number of nailers must be a whole number.) Use Scenario 2Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Order size 2 lots 1 lot 1 lot 3 lots (a) Show a regret table. Order size 2 lots 3 lots Low 13 9 6 Low Demand Medium 16 23 38 High 16 38 61 Demand Medium (b) What decision should be made by the optimist? O 1 lot O2 lots O 3 lots (c) What decision should be made by the conservative? O 1 lot O 2 lots O3 lots (d) What decision should be made using minimax regret? O 1 lot O2 lots O 3 lots High Maximum Regret
- Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Order size Low 2 lots 1 lot 1 lot 3 lots (a) Show a regret table. Order size 2 lots 3 lots 11 9 6 Low Demand Medium 16 24 36 High 16 36 64 Demand Medium (b) What decision should be made by the optimist? O 1 lot O2 lots 3 lots (c) What decision should be made by the conservative? O 1 lot O2 lots 3 lots (d) What decision should be made using minimax regret? O 1 lot O2 lots O3 lots High Maximum Regret2. A toy manufacturer has three different mechanisms that can be installed in a doll that it sells. The different mechanisms have three different setup costs (overheads) and variable costs and, therefore, the profit from the dolls is dependent on the volume of sales. The anticipated payoffs are as follows. Light Demand 0.25 $325,000 $300,000 -$400,000 Heavy Demand 0.3 Probability Wind-up action Pneumatic action Electrical action Moderate Demand 0.45 $190,000 $420,000 S170,000 $400,000 $800,000 $240,000 a. What is the EMV of each decision alternative? b. Which action should be selected? c. What is the expected value with perfect information? d. What is the expected value of perfect information? e. What is the expected opportunity loss?Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Demand Order size Low Medium High 1 lot 2 lots 3 lots (a) Show a regret table. 1 lot Order size 2 lots 3 lots 11 9 6 Low 16 24 38 16 38 59 Demand Medium (b) What decision should be made by the optimist? O 1 lot O 2 lots O 3 lots (c) What decision should be made by the conservative? O 1 lot O 2 lots O 3 lots (d) What decision should be made using minimax regret? O 1 lot O 2 lots O 3 lots High Maximum Regret
- 4.) After 10 years of production, the chemical manufacturing plant has become very successful. Because of its success, a great demand for products came as many consumers wanted the company to sell them their products. To meet the demand, three alternatives were considered. Work overtime to meet demands. Annual overtime expenses are $500,000. Expand the plant to accommodate more production. Fixed annual expenses are $2,500,000. Make a contract with another company to produce additional products at a rate of $1,000,000. The cost of manufacturing products from the three alternatives are $3500, $3000 and $3250 per unit respectively. The plant sells every unit made regardless of how they were made at $15,000 per unit. The expected demand for the product is 150 units with a probability of 50% 250 units with a probability of 35% 350 units with a probability of 7.5% 400 units with a probability of 5% 500 units with a probability of 2.5%Buy vs. Lease Equipment Decision Tree Use the information in the table below to decide whether you want to lease versus buy new technology. Calculate expected value of each outcome and show your calculations (Probability X Impact). Explain the best option based on the outcome, and why. The biggest concerns or risks with purchasing technology are the rapid changes that happen in technology and the low end-of-life value of technology. Therefore, there is a 40 percent chance that the leased equipment will have better contractual value at the end of the lease-period . Alternatively, there is an 85 percent chance that purchasing new technology will have a lower-than-expected value at the end of the project life. The cost for the technology, if leased, is $11,500, versus the cost of purchasing a new technology, which is $15,000. Cost to buy a new technology-$15,000 Probability of having lower-than-expected value at the end of the project life.-85% Probability of that the leased equipment…A suburban retail property in Arlington, Virginia with 60,000 square feet and 600 surface parking spaces was purchased for $6,000,000 at a cap rate of 6.0% with a 60% LTV interest-only loan at a 6% annual interest rate. If after six years the property appreciated by 60%, what would be the amount of the owner’s equity in the property at that time? a. $6,000,000 b. $2,400,000 c. $3,600,000 d. $9,600,000