Expansion Strategy and Establishing a Re Order Point
Expansion Strategy and Establishing a Re Order Point
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 reorder a printer so he or she
doesn’t run outofstock. 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 1,050word 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
What should be the reorder point? How many HP laser printers should he have in stock when he reorders
from the manufacturer?
Format your assignment consistent with APA format. Provide two to three APA formatted references
with in text citing and references page