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

 

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