StudentShare solutions

# Quantative analysis for business - Math Problem Example

## Extract of sampleQuantative analysis for business

Establishing random number intervals for each of the three variables iv. Generating random numbers v. Simulating a series of trials – in this case ten (10) trials will be simulated Step 1 and 2 – Probability and cumulative probability distribution Materials: Cost (\$) Probability Cumulative probability 33 0.18 0.18 35 0.23 0.41 38 0.32 0.73 39 0.27 1.00 Table 1.1 Labor: Cost (\$) Probability Cumulative probability 22 0.12 0.12 23 0.18 0.30 24 0.22 0.52 25 0.28 0.80 28 0.20 1.00 Table 1.2 Utilities: Cost (\$) Probability Cumulative probability 3 0.26 0.26 4 0.43 0.69 6 0.31 1.00 Table 1.3 Steps 1 and 2 are merged in order to provide a clear picture of how the cumulative figures were arrived at. The probabilities are given and the cumulative probabilities are the cumulative totals of these probabilities as shown in Table 1.1 to Table 1.3 Step 3 Determine Random Number Intervals Materials: Cost (\$) Cumulative probability Interval of Probability Random Numbers 33 0.18 0.18 01 – 18 35 0.41 0.23 19 – 41 38 0.73 0.42 42 – 73 39 1.00 0.27 74 – 1.00 Table 1.4 Labor: Cost (\$) Cumulative probability Interval of Probability Random Numbers 22 0.12 0.12 01 – 12 23 0.30 0.18 13 – 30 24 0.52 0.22 31 – 52 25 0.80 0.28 53 – 80 28 1.00 0.20 81 – 00 Table 1.5 Utilities: Cost (\$) Cumulative probability Interval of Probability Random Numbers 3 0.26 0.26 01 – 26 4 0.69 0.43 27 – 69 6 1.00 0.31 70 – 00 Table 1.6 The random numbers relating to the relevant costs associated with the three variables were determined Steps 4 and 5 - Generating random numbers and simulating a series of trials Monte Carlo Simulation Results   Materials Labor Utilities Total   Random Cost Random Cost Random Cost Cost Trial Number per Unit Number per Unit Number per Unit per Unit 1 28 35 21 23 85 6 64 2 14 33 50 24 64 4 61 3 44 38 90 28 15 3 69 4 51 38 71 25 66 4 67 5 91 39 10 22 45 4 65 6 38 35 11 22 74 6 63 7 79 39 70 25 62 4 68 8 70 38 16 23 18 3 64 9 98 39 88 28 74 6 73 10 11 33 67 25 35 4 62 Total 367 245 44 656     Average   36.7     24.5     4.4   65.6 Table 1.7 Steps 4 and 5 have also been merged. The random numbers were taken from a random number table and the relevant material cost that falls within the corresponding random number interval in Step 3 were written beside them. The information in Table 1 indicates the following: 1. The average material cost per unit is \$36.70 2. The average labor cost per unit is \$24.50 3. The average utilities cost per unit is \$4.40 4. The average total cost per unit is \$65.60 Part B The selling price that should be established, assuming the company wants an average markup of \$20 on each unit sold is calculated as follows. \$ Average total cost 65.60 Add: Markup 20.00 85.60 The results of the calculations indicate that in order to obtain an average markup on the cost of the product the company has to sell it for an average price of \$85.60. Inventory Management Part A The amount of inventory that Company A needs to order can be determined with the use of economic order quantity (EOQ) model. According to Williamson (2012) EOQ models are used for identifying the optimal order quantity. In order to do this the model minimizes the sum of certain costs that vary with order size and the frequency of orders. Williamson (2012) describes three order size models – the basic economic order quantity (EOQ) model; the economic production quantity (EPQ) model; and the quantity ...Show more

## Summary

Quantitative Analysis Institution Instructor Date Student ID Decision-Making Models Probabilistic simulation Part A The results in the Table 1.7 were generated with the use of Monte Carlo simulation. According to Heizer and Render (2006) Monte Carlo simulation involves carrying out chance related experiments using random sampling techniques…
Author : ethylherzog
Download 1
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the math problem on your topic
"Quantative analysis for business"
with a personal 20% discount.
Grab the best paper

### Related Essays

Cost Benefit Analysis
In most cases such inefficiencies are caused by monopoly pricing or taxation (Brent 89). In other words, a deadweight loss can be termed as the total surplus resulting from market distortion especially from the side of government regulations on prices and in most cases the levied taxes.
12 pages (3000 words) Math Problem
Capital structure analysis
Now, IST is supposed to raise capital worth \$500 million in order to build a fresh production facility. In the occurrence of a financial distress, the company would experience a great loss of both consumers as well as engineering talents. If IST takes a debt of \$500 million, the managers of the company are afraid that the present value of the cost of financial distress would be more than the tax benefits by an amount of \$20 million.
3 pages (750 words) Math Problem
Ratio Analysis
3 pages (750 words) Math Problem
Numerical analysis
These types of problems (especially systems of differential equations) are solved numerically using a number of similar algorithms which are based on the principles of numerical integration. The definition of the task "solve differential equation" means "integrate differential equation" so all differential equation numerical solving techniques are based on numerical integration, which is the problem of finding area under the curve described by differentiated function.
6 pages (1500 words) Math Problem
Calculus for Business Economics
After t minutes angle covered by the minute hand will be 6t degrees. For in 1 minute, it is 360/60 = 6 degrees. At 3 pm, the hour hand is already at an angle of 90 degrees. After t minutes it will be at an angle of 90 + 0.5t. For in 1 minute hour hand advances by an angle of 6/12 = 0.5 degrees.
4 pages (1000 words) Math Problem
Financial Analysis 334
This shows that company has no problem in paying off its debts. The position of Jones Corporation is also good and it will have no problem in paying off its debts. Since, both firms can pay-off their debts easily given the situation let's now eliminate the illiquid current asset factor from our ratio calculation.
2 pages (500 words) Math Problem
Honours Analysis
made into a continuous process whereby, intervals that comprise [0, 1] – (I1I2) are subdivided into three subintervals, while removing their middle thirds. This can be denoted as Cantor Set C = In whereby In+1 is constructed by trisecting In and remove the middle third with
3 pages (750 words) Math Problem
Job selection-multiple criteria decision analysis
She has excellent curriculum vitae with a high grade point average and a strong record of campus participation in clubs and activities. As a result, she has had a number of good interviews with various companies. She now has
7 pages (1750 words) Math Problem
Multiple criteria decision analysis
In connection to this the main aim of this project is to use MCDA to solve the problem. For the last 10 year Bernard has wanted to own a home. After discussing with his wife, they decided to take a mortgage. But now the problem is, he does not
7 pages (1750 words) Math Problem
FINANCIAL DATA ANALYSIS
Free cash flow model of valuation estimates value of a firm based on its fundamentals. The company is expected to pay its shareholders based on intrinsic value of the firm. In addition, this value is reflected by net present cash flow. It’s
3 pages (750 words) Math Problem
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation