The Bell Computer Company is considering a plant expansion enabling t Homework Help | Page 2

available, he will lose that sale, plus possibly additional sales. He wants the probability of running
short (stock-out) in any week to be no more than 6%.
Purpose of Assignment
This assignment has two cases. The first case is on expansion strategy. Managers constantly
have to make decisions under uncertainty. This assignment gives students an opportunity to use
the mean and standard deviation of probability distributions to make a decision on expansion
strategy. The second case is on determining at which point a manager should re-order a printer
so he or she doesn't run out-of-stock. The second case uses normal distribution. The first case
demonstrates application of statistics in finance and the second case demonstrates application of
statistics in operations management.
Assignment Steps
®​
Resources: ​
Microsoft Excel​
, Bell Computer Company Forecasts data set, Case Study
Scenarios
Write​ a 1,050-word report based on the Bell Computer Company Forecasts data set and Case
Study Scenarios.
Include​ answers to the following:
Case 1: Bell Computer Company
●
Compute the expected value for the profit associated with the two expansion
alternatives. Which decision is preferred for the objective of maximizing the expected
profit?
●
Compute the variation for the profit associated with the two expansion alternatives.
Which decision is preferred for the objective of minimizing the risk or uncertainty?
Case 2: Kyle Bits and Bytes