# Kaplan MM305 Unit 7 Project Assignment 2016

1.

Even though independent gasoline stations have been having a difficult time,

Susan Solomon has been thinking about starting her own independent gas

station. Susan’s problem is to decide

how large her station should be. The

annual returns will depend on both the size of the station and a number of

marketing factors related to oil industry and demand for gasoline. After careful analysis, Susan developed the

following table:

Size of Gasoline

Station

Good

Market ($)

Fair

Market ($)

Poor

Market ($)

Small

$75,000

$25,000

-$10,000

Medium

$100,000

$70,000

-$20,000

Large

$250,000

$75,000

-$30,000

You may use

Excel QM or QM for Windows:

1.

What

is the Maximax decision?

Answer:

Explanation (include software output or calculation):

2.

What

is the Maximin decision?

Answer:

Explanation (include software output or calculation):

3.

What

is the criterion of realism decision? Use ? = 0.3.

Answer:

Explanation (include software output or calculation):

4.

Develop

an Opportunity Loss Table.

Table:

5.

What

is the Minimax Regret Decision?

Answer:

2. Data collected on the

yearly demand for 50-pound bags of fertilizer at Sunshine Garden Supply are

shown in the following table.

Year

Demand

for Fertilizer (1,000s of Bags)

1

5

2

8

3

5

4

6

5

6

6

7

7

8

8

10

9

12

10

14

11

16

1.

Develop

a three-year moving average to forecast sales in year 12.

Answer:14,000 bags

Sunshine Garden

Forecasting

Moving averages

– 3 period moving average

Num pds

3

Data

Forecasts and Error Analysis

Period

Demand

Forecast

Error

Absolute

Squared

Abs Pct Err

Period 1

5

Period 2

8

Period 3

5

Period 4

6

6

0

0

0

00.00%

Period 5

6

6.333333333

-0.333333333

0.333333333

0.111111111

05.56%

Period 6

7

5.666666667

1.333333333

1.333333333

1.777777778

19.05%

Period 7

8

6.333333333

1.666666667

1.666666667

2.777777778

20.83%

Period 8

10

7

3

3

9

30.00%

Period 9

12

8.333333333

3.666666667

3.666666667

13.44444444

30.56%

Period 10

14

10

4

4

16

28.57%

Period 11

16

12

4

4

16

25.00%

Total

17.33333333

18

59.11111111

159.56%

Average

2.166666667

2.25

7.388888889

19.95%

Bias

MAD

MSE

MAPE

SE

3.138765976

Next period

14

2.

Develop

a 3-year weighted average to predict demand in year 12, in which sales in the

most recent year is given a weight of 3, the second most recent year is

weighted 2 and sales in the third most recent year has a weight of 1.

Answer:14,667 bags

Forecasting

Weighted moving

averages – 3 period moving average

Data

Forecasts and Error

Analysis

Period

Demand

Weights

Forecast

Error

Absolute

Squared

Abs Pct Err

Period 9

12

1

3 periods ago

Period 10

14

2

2 periods ago

Period 11

16

3

1 periods ago

Total

0

0

0

00.00%

Average

0

0

0

00.00%

Bias

MAD

MSE

MAPE

SE

0

Next period

14.66666667

Not enough data to compute the

standard error

3.

Develop

a regression/trend line to estimate the demand for fertilizer in year 12.

Answer:

Explanation

(include software output or calculation):

4.

Analysis

of the forecasting errors indicates which forecasting constant is best in this

situation?

Answer:

Explanation:

3. Kaplan College has

decided to “wire” its campus. The first stage in this effort is to

install the “backbone,” i.e., to connect all the buildings. The table

below gives the distances between the various buildings on campus in hundreds

of feet.

You may use QM for Windows or

complete it by hand:

Distances in Hundreds of Feet

From

To

Building

1

Building

2

Building

3

Building

4

Building

5

Building

6

Building

1

5

6

4

4

7

Building

2

5

3

4

5

Building

3

6

3

4

Building

4

2

3

Building

5

5

Building

6

1.

How

should the buildings be connected to minimize the total length of cable?

Answer:

Explanation (including any calculations or software output):

2.

What

length of cable is required?

4. The

following represents the distances in miles from a warehouse (node 1) to

various cities in Montana. The major outlet store is located at node 7.

From

Node

To

Node

Distance

1

2

50

1

4

140

2

3

20

2

4

25

3

4

50

3

5

25

3

6

75

4

5

50

4

7

20

5

6

45

5

7

75

6

7

40

You may use QM for Windows or

complete it by hand:

1.

Find

theshortest route and distance from Node 1 to Node 7.

Answer:

Explanation (including any

calculations or software output):

5. The

network of a city sewer system and their capacities are shown below. Remember

that the arc has both capacity and reverse capacity. For example, row 1 is the

flow from node 1 to node 2 and row 2 is the reverse flow from node 2 to node 1.

There are seven branches in this network.

From

Node

To

Node

Fluid

Flow

1

2

100

2

1

200

1

3

150

3

1

250

1

4

400

4

1

400

1

5

250

5

1

150

2

4

350

4

2

200

3

4

250

4

3

350

3

5

100

5

3

250

You may use QM for Windows or

complete it by hand:

1.

Determine the maximum flow (inhundreds of gallonsof water per minute) from node 1 to

node 5.

Answer:

Explanation (including any

calculations or software output):

6. The governor of

Michigan believes that the state can improve the state’s crime rate if the

state can reduce the college debt carried by its citizens and if they can

increase the percent of the population covered by health insurance. (This

requires you to use the States Dataset file that is included in Doc

Sharing->Instructor Graded Projects.)

1.

Using

theStates Data Set and Excel DataAnalysis

(Regression),create the multiple regression

prediction equation of the form? =b0 +b1(X1) +b2(X2)

Answer:

Explanation (including any calculations or software output):

2.

Predict

the crime rate for Michigan if the college debt were $20,000 and the percent

not covered by insurance was 15% or 15?

Answer:

Explanation (including any calculations or software output):

7. A concessionaire for the local ballpark

has developed a table of conditional values for the various alternatives

(stocking decisions) and states of nature (size of crowd).

Stocking Decision

Large

Crowd ($)

Average

Crowd ($)

Small

Crowd ($)

Large Inventory

$32,000

$22,000

-$2,000

Average Inventory

$25,000

$20,000

$6,000

Small Inventory

$7,000

$6,000

$5,000

You may use

Excel QM or QM for Windows:

If

the probabilities associated with the states of nature are 0.50 for a large

crowd, 0.25 for an average crowd, and 0.25 for a small crowd, determine:

1.

The

alternative that provides the greatest expected monetary value (EMV).

Answer:

Explanation (including any

calculations or software output):

2.

The

expected value of perfect information (EVPI).

Answer:

Explanation (including any

calculations or software output):