Decision Science

Part 1 - Centrino scoter society CaseThe Centrino scoter corporation manu positionured two specialized pret abateings of motorized bicycle (or ice yacht ) in a single throwt . Manu accompanimenturing operations were separate into four departments : metal stamping railway locomotive multitude puzzle ci assembly and forge 102 assemblyof this department s force panel 1 : calendar monthly CapacityDepartment sit around one hundred one sit 102Metal stamping 2 ,500 3 ,500Engine assembly 3 ,333 1 ,667 form hundred and one assembly 2 ,250 - mannequin 102 assembly -1 ,500 The prices to dealers for the two ensamples were 2 , snow for pretending ci and 2 ,000 for mildew 102 . Centrino followed the price leadership of one of the larger manufacturers in the intentness . Fortunately , because of the Centrino image , the fellowship was able to lead astray as many cycle per seconds as it could get to . The performance schedules it had followed during the first sixer months of the course resulted in a monthly output of 333 bewilder hundred and one cycle per seconds and 1 ,500 lesson 102 rides . At this level of return , two the puzzle 102 assembly and the railway locomotive assembly departments were run at capacity , but the metal stamping department was operational at only 56 .2 of capacity and the prototype ci assembly department was at only 14 .8 beat hails at this level of payoff atomic numeral 18 given(p) in slacken 2 , and further details on viewgraph make up ar given in Table 3Table 2 : Standard salutes of the Two ModelsModel hundred and one Model 102Direct Materials 1 , two hundred 1 ,000Direct Labour Metal Stamping 40 30Engine conclave 60 120Final Assembly cytosine 75 knock Metal Stamping 216 169Engine Assembly one hundred thirty 251Final Assembly 445 1752 ,191 1 ,820See Table 3Table 3 : Overhead figure for the Next YearDepartment Overhead per Unit 101 Variable Overhead per Unit 102Metal Stamping 325 ,000 135 ,000 120 100Engine Assembly 420 ,000 85 ,000 cv ccModel 101 Assembly 148 ,000 90 ,000 175 -Model 102 Assembly 262 ,000 75 ,000 - 1251 ,155 ,000 385 ,000 400 425Based on planned product rate of 333 Model 101 hertzs and 1 ,500 Model 102 hertzs per monthFixed eitherwherehead was distributed to role models in equilibrium to degree of capacity utilizationTable 4 : Profit and Loss avowal for the Previous six months000sNet Sales 21 ,950 terms of Goods Sold 20 ,683 vulgar Margin 1 ,267Selling , Administration and General Expense 1 ,051Net Profit 216Tax 115Net r from each one after Taxes 101 At the nigh re centimeime monthly planning session of the fraternity s executives dissatisfaction was evince with the company s scratch performance as report in the six-month realize and loss statement just prepared (see Table 4 . The sales animal trainer passed out that it was impossible to sell the Model 101 cycles/second to yield a earn and suggested that it be dropped from the promissory note in to improve over- any gainfulnessThe caput control objected to this suggestion . The real trouble is that we are trying to sorb the entire obstinate overhead of the Model 101 assembly department with only a sm two number of units of take Actually these units are making a contribution to overhead , even though it s not adequate to cover fixed be , and we d be worse off without them . In fact , it seems to me quite possible that we d be better off by change magnitude deed of Model 101 bikes , cutting keystone if necessary on Model 102 output in that location would sure seem to be a very strong inclination in favour of ignoring the fixed overhead costs when addressing the doing planning problemThe work manager pointed out that in that respect was some other way in which output of Model 101 bikes could be stepped up , which would not require a cutback in Model 102 yield . This would be through the purchase of locomotives from an exterior provider , thus relieving the present capacity problem in the engine assembly department . If this lead of action were followed , Centrino would probably yield the supplier with the necessary materials but would reimburse the supplier for toil and overhead costsAt this point the managing director entered the discussion . He asked the chief restrainer , the sales manager , and the production manager to take in together to consider the issues raised by their comments and to report their recommendations to him the side by side(p) dayPrepare a report that addresses the following four questionsAssuming no compound in present capacity and bring , what would be the well-nigh juicy product pleatThere are some(prenominal) product mixes that could be envisioned in to annex profitability , and several factors (direct and mediate ) should be considered in determining the just about economically possible solution to the Centrino Scooter bon tonThe documents above show that the pricing to dealers for the Model 101 may lack to be reviewed . In fact the Model 101 scooter is being offered to dealers at 2100 per unit while each Model 101 bike is demanding production costs estimated at 2191 per unit . In other manner of speaking , the Centrino Scooter come with is nurturing a loss in care the certain pricing strategy for the Model 101 . There may be unpredictable reasons why the Model 101 remained in production despite these disadvantages . In to further increase profitability , the Centrino Scooter company officials should consider a high price to dealers in to make some profit on each model builtAnother method to considerably increase profitability is in increasing production of the Model 102 bike which merchantman be manufactured at a lesser cost than the Model 101In agreement with the Sales manager , there are obviously some incentives in dropping the Model 101 production altogether to concentrate operations on the Model 102We are presenting three diametrical scenarios where the production mix has been altered to inform on affects on the common profit of the company Scenario 1- Model 101 - 200 Units /month- Model 102 - 1500 Units /monthIncome Statement Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 over Six MonthsMonthly Capacity model 1 200 200 200 200 200 200Model 1 step up 420 ,000 .00 420 ,000 .00 420 ,000 .00 420 ,000 .00 420 ,000 .00 420 ,000 .00Model 2 Rev 3 ,000 ,000 .00 3 ,000 ,000 .00 3 ,000 ,000 .00 3 ,000 ,000 .00 3 ,000 ,000 .00 3 ,000 ,000 .003 ,420 ,200 .00 3 ,420 ,200 .00 20 ,521 ,200 .00 Month Capacity model 2 1500 1500 1500 1500 1500 1500p COGSModel 1 Cost 438 ,200 .00 438 ,200 .00 438 ,200 .00 438 ,200 .00 438 ,200 .00 438 ,200 .00 2 ,629 ,200 .00Model 2 Cost 2 ,730 ,000 .00 2 ,730 ,000 .00 2 ,730 ,000 .00 2 ,730 ,000 .00 2 ,730 ,000 .00 2 ,730 ,000 .003 ,168 ,200 .00 3 ,168 ,200 .00 19 ,009 ,200 .00 Gross Profit 252 ,000 .00 252 ,000 .00 252 ,000 .00 252 ,000 .00 252 ,000 .00 252 ,000 .00 1 ,512 ,000 .00 The presented production mix focuses on trim the level of production of the Model 101 bike to 200 items per month , while charge the production level of the Model 102 bike at 1500 . In doing so , the Centrino Scooter Company push aside keep a monthly profit of 252 ,000 in parity to the 211 ,116 of monthly profit that would be generated found on a production aggregate of 333 Model 101 and 1500 Model 102 bikes Scenario 2- Model 101 - 0 Units /month- Model 102 - 1700 Units /monthIncome Statement Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 over Six MonthsMonthly Capacity model 1 0 0 0 0 0 0Model 1 Rev 0 .00 0 .00 0 .00 0 .00 0 .00 0 .00Model 2 Rev 3 ,400 ,000 .00 3 ,400 ,000 .00 3 ,400 ,000 .00 3 ,400 ,000 .00 3 ,400 ,000 .00 3 ,400 ,000 .003 ,400 ,000 .00 3 ,400 ,000 .00 20 ,400 ,000 .00 Month Capacity model 2 1700 1700 1700 1700 1700 1700p COGSModel 1 Cost 0 .00 0 .00 0 .00 0 .00 0 .00 0 .00 0 .00Model 2 Cost 3 ,094 ,000 .00 3 ,094 ,000 .00 3 ,094 ,000 .00 3 ,094 ,000 .00 3 ,094 ,000 .00 3 ,094 ,000 .003 ,094 ,000 .00 3 ,094 ,000 .00 18 ,564 ,000 .00 Gross Profit 306 ,000 .00 306 ,000 .00 306 ,000 .00 306 ,000 .00 306 ,000 .00 306 ,000 .00 1 ,836 ,000 .00 The presented production mix focuses on reducing the level of production of the Model 101 bike to secret code items per month , while increasing the production level of the Model 102 bike to 1700 . In doing so , the Centrino Scooter Company screwing keep a monthly profit of 306 ,000 in comparison to the 211 ,116 of monthly profit that would be generated baseborn on a production Mix of 333 Model 101 and 1500 Model 102 bikes Scenario 3- Model 101 - 200 Units /month- Model 102 - one hundred ninety0 Units /monthIncome Statement Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 over Six MonthsMonthly Capacity model 1 200 200 200 200 200 200Model 1 Rev 420 ,000 .00 420 ,000 .00 420 ,000 .00 420 ,000 .00 420 ,000 .00 420 ,000 .00Model 2 Rev 3 ,800 ,000 .00 3 ,800 ,000 .00 3 ,800 ,000 .00 3 ,800 ,000 .00 3 ,800 ,000 .00 3 ,800 ,000 .004 ,220 ,200 .00 4 ,220 ,200 .00 25 ,321 ,200 .00 Month Capacity model 2 xcl0 1900 1900 1900 1900 1900p COGSModel 1 Cost 438 ,200 .00 438 ,200 .00 438 ,200 .00 438 ,200 .00 438 ,200 .00 438 ,200 .00 2 ,629 ,200 .00Model 2 Cost 3 ,458 ,000 .00 3 ,458 ,000 .00 3 ,458 ,000 .00 3 ,458 ,000 .00 3 ,458 ,000 .00 3 ,458 ,000 .003 ,896 ,200 .00 3 ,896 ,200 .00 23 ,377 ,200 .00 Gross Profit 324 ,000 .00 324 ,000 .00 324 ,000 .00 324 ,000 .00 324 ,000 .00 324 ,000 .00 1 ,944 ,000 .00 The presented production mix focuses on reducing the level of production of the Model 101 bike to 200 items per month , while increasing the production level of the Model 102 bike to 1900 . In doing so , the Centrino Scooter Company throne keep a monthly profit of 324 ,000 in comparison to the 211 ,116 of monthly profit that would be generated based on a production Mix of 333 Model 101 and 1500 Model 102 bikes The production mixes presented above all offer a greater profitability in estimating comparable fixed costs . It seems that reducing the production capacity of the Model 101 bike has immediate consequences in elevating the profit margin for the company . The pass by examples shown previously do not include the G A expenses or the net profit over the six month period of interest . in time , it outlines clearly that the Centrino Scooter Company has the ability to increase profitability in planning to alteration the production capacity of the Model 101 bike which is the major reason for the subjectd level of profitability noticed by company officials that is in considering that fixed costs remain almost equivalentThe sales manager is suggesting to eliminate the Model 101 bike altogether from production . While this is feasible , it may be preferable for the Centrino Scooter Company to consider releasing the production of the Model 101 bike in several step . It seems preferable to first reduce to production level and bear witness of market response prior to eliminating it altogether from productionThe chief accountant is suggesting rather to increase production of the Model 101 bikes in to better profit from the model fixed contribution to the calculate . Only the chief accountant is omitting to mention that the overall variable quantity cost of the increase production level of the Model 101 bike may cause further losses to the Centrino Scooter Company . In fact , in considering a production mix of 700 Model 101 and 700 Model 102 bikes , the monthly gross income of the company would drop to 203 ,000The production manager s suggestion to consider the engine assembly from the production of the Model 101 bike would bring the immediate model cost of manufacturing the bike spile by 190 per unit . That difference would be exuberant to offer the bike to dealers at a profit , thereby solving the present issue . However , the production manager while making this suggestion does not mention the associated costs of purchasing engines with outside suppliers . Each engine would make believe to cost less than 100 per unit in for the Centrino Scooter Company to make a profit with each sale . In comparison increasing the production level of the Model 102 bike only makes sense considering the lower cost of manufacturing of the bikeIt is clear that several production mixes are able to allow the Centrino Scooter Company a greater profitability . Company officials should therefore considering the divers(a) production mixes further in to sensibly increase their month to month profitability , and the major issue in doing so is in identifying all the factors that could be addressed to realistically reduce the cost of manufacturing of the Model 101 bike . If no suitable woofs seem worth it to the Centrino Scooter Company , the best option remains to eliminate the production of the Model 101 bike while concentrating on increasing and improving production capacity of the Model 102 bikeIf Centrino opts to purchase engine assembly capacity from an outside supplier , what is the most the company should be prepared to payThe engine assembly cost for the Model 101 bike comes to 190 per unit produced . In to obtain the engine from an outside supplier and make it economically beneficial to the Centrino Scooter Company , the officials should talk over to obtain at a price lower than 190 . The optimum price for an engine would be below 100 per unit , thereby offering a direct profit on sale for each Model 101 itemIn controversy that maximizing short-run contribution was not necessarily to the long haul good of the company , the marketing manager wanted to produce as many Model 101s as possible . It was concur to maximize the contribution for the month as long as the number of 101s produced was at least four times the number of 102s . What is the resulting optimal product mixThey are several plausible mixes . In fact the production level of the Model 101 bike could be profitable if the production level if increased abundant such that the revenues of the bikes makes it profitable even with the Model 101 . However the Centrino Scooter profitability comes mostly from the production of the Model 102 bike , which as a personal opinion should be the point of focus here . Also is there such demand of Model 101 bikes to justify an increase in production when the officials are apprised that it is causing issues to the company . In the gist that such demand exits and seems viable topursue , it would in any case be preferable to review the entire manufacturing process for the Model 101 bike in to reduce its cost . Such comparison can be achieved in comparing the two models and reviewing methods to reduce the production cost difference between both modelsIn fact , the engine assembly line can be put on overtime . Suppose that efficiencies do not change and comfortable overtime units are useable to process at most another 2000 Model 101 bikes or 1000 Model 102 bikes (The overtime could be use part for 101 bikes and partly for 102 bikes with a corresponding reduction in the capacity available for each ) If direct labour costs increase by 50 for overtime , and if the fixed overhead on the line for overtime is 40 ,000 , with the variable overhead remaining the same , evaluate whether this overtime option is attractiveThe option seems attractive principally based on the overall number of units that are saleable . Increasing the direct labour by 50 fashion a raise of the associated variable cost by 100 for Model 101 bike and 112 .5 for Model 102 bike . Of course the increased cost can be made up for by the level of production in assuming all items are purchased . Although the option is economically sound , meaning profitable for the company , it does seem to be the best available method to maximizing the profitability of the Centrino Scooter CompanyPart 2 - Tilde s Junk leaflet CaseTilde was a multinational management consulting firm specializing in assisting medium- to large-size firms in strategic planning . Jason Lewis , managing partner of Tilde , had recently been made cognizant of the ontogeny problem of netmail electronic mails . Lewis was certainly not promote by the most recent report from Hotmail .com , which say . up to 80 per cent of the two trillion messages we receive every day are e-mail He had become aware that the number of junk electronic mails has grown to about 90 billion messages a day .

He had also read that On a world-wide basis the information technology (IT ) cost of traffic with netmail was estimated to be around 198 billion by the end of 2007Lewis was facing the question : what should be done to address this ontogenesis problem within Tilde ? Tilde s IT chief , Robert Bedford , reported that 40 per cent of Tilde s current email mass was netmail , and that the rate was increasing each year , even in spite of young federal anti-spam legislation . Bedford recently briefed Lewis on a mixture of possible spam solutions , including the following four options Bayesian Filtering - This method analyses a large sample of spam and normal e-mails based on specific tokens or markers . When a cutting e-mail is received , all the matching tokens within the e-mail are extracted , and the prospect of whether the e-mail is spam or normal is computed This access is dynamic , making it difficult for spammers to gameRuled-based - This method utilises a put in of get holds , often involving several hundred . The procedure checks a new e-mail for every rule . For example , if the header of the e-mail contains the statement 100 free .com it might be spam . After processing all the rules , the program computes a metric function that it compares to a standard as a basis for classifying each incoming e-mail as either normal or spam . Spammers can over time , determine the rule set and develop a work-aroundBlacklists - This method is based on a list of known e-mail spammers . An incoming e-mail that matches an address on the blacklist provide be classify as spam . This approach minimizes imitative irresponsibles . However spammer s can simply stay one step ahead by obtaining new e-mail addressesSignature - This method uses a digital credential scheme . The sender would affirm to include a witness that could then be used for tracking spammers . This approach tends to be expensiveBedford also reported that any anti-spam solution would need to have the following characteristics : 1 ) the true , 2 ) scalability , and 3 aptitude . Lewis asked what main performance metrics were associated with each of these characteristics . Bedford responded that the accuracy remainder was to minimize the number of paradoxical irresponsiblely chargeds and false bans Lewis asked Bedford to describe these accuracy measures in layman language . Bedford indicated that a false positive was a normal e-mail being classified as a spam and that a false negative spam being classified as normalBedford was aware of one Bayesian diffuseing system , provided by Shrubbery Ltd , that sounded pretty good . The company reported that in 90 per cent of cases where the e-mail is normal , the distort will predict normal , and in 90 per cent of cases where the e-mail is spam , the filter will predict spam . Lewis asked , What is the source of these conditional probability harbors Bedford responded that they were based on a review of the classification of hundreds of previous e-mailsLewis then asked , How does a Bayesian filter work Bedford stated that the Bayesian model computed a set of revised probabilities based on corporate trust the current proportion of spam e-mail with the performance of the Bayesian filter . Lewis asked whether there were different filter performance levels . Bedford responded that , yes , there were and that there was an alternative filter available that was provided by Python Ltd . In 95 per cent of cases where the e-mail is normal , the Python filter will predict normal , and in 75 per cent of cases where the e-mail is spam , the Python filter will predict spam . Python offered their filter at 110 ,000 , while Shrubbery quoted 75 ,000 for theirsBedford concluded his creation by stating that any spam solution must be scalable in the sense that it must accommodate increased e-mail traffic and to a greater extent spammers . He also stated that the solution must be easy to go across . Lewis was intrigued by his IT chief s presentation and more specifically , by the alleged(prenominal) Bayesian solution . He stated that minimizing false positives was more important than minimizing false negatives . He went on to say that it was all-important(a) that the company should receive normal e-mail . As the apprize broke up , Lewis directed Bedford to develop a plan to address the spam problem in 2009 , based on the Bayesian model , and to report back within a weekThe e-mail traffic in 2009 was uncertain but Bedford estimated that it would be 250 ,000 e-mails for the whole year . For simplicity , he assumed that the portion of these e-mails that would be spam would be 40 per cent , which was the current rate . The hardest part was to evaluate the cost of false positive and false negative . It was clear that these two figures had to be different . In particular the cost of a false positive had to be higher than the cost of a false negative . To start with Bedford decided to set the cost of a false negative to 1 , and the cost of a false positive to 5 . Bedford knew that these figures were going to be challenged by LewisAnswer the following questionsDraw a decision tree to help Bedford choose between the two Bayesian spam filters . Using an judge value metre , find the best consequenceInvestigate compatibility of both spam filters with the majority of the computers used at TildeSelect a department within Tilde (IT for instance ) to have 50 of the computers carry the Shrubbery Bayesian filter , and the other 50 carry the Python Bayesian filterDuring one month , implement both spam retrieving software within ITAfter one monthEvaluate results of the Shrubbery versus the PythonMake note of all issues that occurred within the month relating to either packageDetermine with all considerations which is best to implement at TildeWith results on-hand , deploy the best performing Bayesian spam filter throughout the organization computersHelp Bedford analyze how the decision taken in (a ) would change with respect to the cost of a false negative and the cost of a false positiveThe cost of a false positive was set at 5 . thusly , a change would be necessary to consider if the elect software led to more false positives than the other . In fact , as stated in the text , the value of a false negative is considerably less than that associated with a false positiveBedford was concerned about the uncertainty in the volume of the e-mail traffic in 2009 . How would the decision taken in (b ) change with respect to the volume of trafficIt would not considering that the decision tree shown in a ) was carefully followed for accuracy , scalability , and efficiency . A suitable method to insure that the level of thrown-away(prenominal) email traffic remains the same on average should also come from an internal company initiative to get to the base of the issue . Several spam mails can be avoided in implementing an enhancement model to teach employees how to better distribute their company email addresses . The other aspect would be in insuring that both chosen software packages have been used in akin sized enterprises , and they have proven to be scalable with growing company email trafficHe decided to model the uncertainty in the volume of e-mail traffic in 2009 . He estimated that it would be 250 ,000 e-mails for the whole year with probability 0 .6 , 100 ,000 e-mails with probability 0 .1 , and 500 ,000 e-mails with probability 0 .3 . Using an expected value criterion , find the best outcomeThe best outcome would be a false prediction , or other than virtually no additional email traffic for the year . Although , that would be in demand(predicate) from any company standpoint , it would be realistic to keep incoming spam at the concluding possible therefore setting company objectives to reduce unwanted email to a couple of thousand a monthIf it s desirable to find a better option based on the predicted count of spam mails for 2009 for the Tilde Company , then other factors would need to be justified so as to give a realistic correlation of each of the probabilistic values charge to the predicted spam throughout the yearNamePAGE 9 ...If you want to get a full essay, order it on our website: Orderessay

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