Manasci Reviewer

Topics: Linear programming, Simplex algorithm, Optimization Pages: 3 (1103 words) Published: May 10, 2013
I. Decision Trees Bee’s Nest Inter Prize is a company that manufactures adhesives that are used in tapes and glues. Currently, they are thinking of a business proposition of opening another branch in the province in order to increase their market and gain more sales. Currently, their revenue is backed up with a good market demand giving them approximately P10,000 income with high demand and they will incur a loss of P500 on times when demand is low due to the fixed costs of the company. Probability of a favorable market is 60%. The company has a few couple of choices in the plans for expanding the company, and after some deliberation, they have come up with the following decisions: 1) Expand with a Large Factory, having an estimate increase in income of P11,000 on a good demand and a loss of P1000 on a bad demand. 2) Expand with a Medium Factory, having an estimate increase in income of P8,000 on a good demand and a loss of P800 on a bad demand. 3) Expand with a Small Factory, having an estimate increase in income of P5,000 on a good demand and a loss of P600 on a bad demand. In hearing of their pending decision, a marketing research firm comes up to the company to offer their services for P500. They say that in accepting their help, the market’s percentage of becoming favorable would increase to 85%. Of course, they can opt to stay in their current state to prevent risks. a. Construct the decision tree showing the different decisions that the company can undergo. b. Compute the revenues and losses that the company might incur in making these decisions and determine which decision would be the best for the company. II. Linear Programming A. Café Therea is a newly opened business that produces two kinds of food. Rice Toppings and Mixed Rice Meals. Both of which use three kinds of ingredients: Rice, Meat, and Sauce. The Rice Toppings needs two scoops of rice, six and two thirds bits of meat, and one dip of sauce; while the Mixed Rice Meals use two and one thirds...
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