14. An operations manager\'s staf has compiled the information below for five ma

Question

14. An operations manager's staf has compiled the information below for five manufac- ion and turing alternatives (D, E, F, G, and H) that vary by production technology and the capacity of the machinery. All choices enable the same level of total product have the same lifetime. The four states of nature represent four levels of consumer acceptance of the firm's products. Values in the table are net present value of future profts in millions of dollars. Forecasts indicate that there is a 0.1 probability of ac- ceptance level 1, 0.2 chance of acceptance level 2, 0.4 chance of acceptance level 3, and 0.3 change of acceptance level 4. States of Nature 12 3 4 Alternative D 50 50 70 60 Alternative E Alternative F 30 40 80 100 70 80 50 60 Alternative G-100 -10 120 200 Alternative H -90 -80 100 180 Using the criterion of expected monetary value, which production alternative should be chosen? (a) D (b) E (c) F (d) G (e) H 15. Intangible costs include which of the following? quality of prospective employees quality of education availability of public transportation all of the above (a) (b) (c) (d) 16. Which of the following approaches is also called a "job shop"? (a) product-oriented layout (b) process-oriented layout (c) work-cell layout (d) fixed-position layout

Explanation / Answer

Questions 14)

EMV for various alternatives is as below

EMV of D = 50*0.1+50*0.2+70*0.4+60*0.3 = 61

Similarly ,

EMV of E = 73

EMV of F = 61

EMV of G = 96

EMV of H = 69

Therefore, option d is correct. Choose alternative G

Question 15)

d - All of the above

Question 16)

Option b - Process oriented layout

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