Bell
computer forecast company week 3
David
Vaughn
Qnt/561
Heidi
Clark
11/12/2019
Bell
computer forecast company week 3
The
assignment is to look over two separate cases using the excel spreadsheet. I am
to then take and interpret the data to identify and discuss the decisions based
on the statistics within. One case will be determined by the mean and standard
deviation and the second normal distribution. Once the information is
determined my paper will discuss the factors.
Case
one: Bell computer company
The
mean of the expected value is the sum of the numbers or probabilities that have
been factored with the expected outcomes. Also known as the average of long run
occurrences (Black). The numbers within are
not acquired through using a finance formula like a future value formula that
may give you the amount of a annuity payment. This is also true for the return
on investment formula, which is ROI= total gain (or loss)/ total cost of
investment (CHERYL
CLEAVES).
No this is a statistical formula used to average the gain or expected gain of
probabilities in an occurrence, the formula being; µ= ∑
(x) = ∑ [ x* P (x) ] (Black). The goal in this scenario is to assess risk and describe
why a low risk or hgh venture is preferred. Having shown the expected value
formula the following paragraph will explain its use and why the proposed
outcome is preferred.
Case One: The mean of the expected value
and explanation
The
mean of the expected value formula µ= ∑ (x) = ∑ [ x* P
(x) ] (Black) is different from other ratio formulas as explained in
the previous paragraph. If I were to search for the average cost of a product I
again would negate the purpose of this report. Explaining that AVC (average
variable cost) = Total variable cost/ Q (output) (McConnell
& stanley Brue) will not lead to a discovery of why the
Bell company should take a low-risk venture. It can be explained with the
reasoning and summary of my gathered notes on the expected value formula.
µ= ∑
(x) = ∑ [ x* P (x)] (Black)says that the average
of long run occurrences can be shown in that way. Using the excel spreadsheet when
you look it over it gives values and percentages. A brief summary will look
this way:
| Low: 50 | 20% |
|
Medium: 150 |
50% |
|
High: 200 |
30% |
The idea here is to give an idea of what you
may find looking over the excel spreadsheet. However, from this
I can show how I have deduced using the mean of expected value formula that
taking the Medium expansion will lead to the best outcome. Simply put no
company likes volatility or the chance that they may lose money. We can see in
most business classes that it may cost money to make money and here we can see
that making x = an outcome and P probability of that outcome. May look tis way ∑[
x*P(x)] or Medium (150) * .50 = 75. This in my opinion is the safest and most
profitable of each outcome. Showing the computations on the excel spreadsheet.
Case 2 Kyle’s bits and bytes Using
the normal distributionformula as P(x>.06| µ=200
and σ =30 how would I solve the question? The problem may be deduced for
Kyle’s bits and bytes in this way; you want x to represent the number of printer’s
available form week to week. With variable demand or the average being known as
30 or σ =30 (standard deviation). I would then simplify the matter and change x
to any possible outcome now x -µ =? If I used the z score formula, then it may
look like this how can I now deduce
the inventory point I chose the 6% of the inventory. I see that 6% of 200 is
12, I let that represent x in the formula. Then I subtracted µ or 200 as
12-200= 188. Lastly, I divided the standard deviation σ = 30 by the sum of 188.
With 5.33 (rather 5), So I looked over the Z score .4999997. So I think the
reorder point should be every 5 or 6 sales or when there is at least halve of
the starting inventory (no matter the number) because of the z score .4999997
or 50%.
Conclusion
I would want my numbers to be accurate in my business. I think that having the security of understanding would give greater confidence in my abilities. In this report I feel that my accuracy for what this is may suffice in what I used it for but there needs to be a more finite definition to my work. I feel that having used the table and the other formulas for both cases leaves me with the satisfaction of possibly doing the work right but as a manager I would want my work checked over and applied. The familiarity in doing the statistics may one day grow. At this point seeing that the z score leaves me with the sense of having done the work and seeing that no matter what I plugged in for x, I should still be able to see a point or figure. Along with the z score or table itself that gave me confidence in having used the functions properly. I used the z score as a percentage which seemed like it’s best use.
Typos that I may have corrected may have appeared in this one, Sorry about that.