**Must have in text citations and references according to APA standards, where cited works are used*****
A General Manger of Harley-Davidson has to decide on the size of a new facility. The GM has narrowed the choices to two: large facility or small facility. The company has collected information on the payoffs. It now has to decide which option is the best using probability analysis, the decision tree model, and expected monetary value.
Options:
Facility
Demand Options
Probability
Actions
Expected Payoffs
Large
Low Demand
0.4
Do Nothing
($10)
Low Demand
0.4
Reduce Prices
$50
High Demand
0.6
$70
Small
Low Demand
0.4
$40
High Demand
0.6
Do Nothing
$40
High Demand
0.6
Overtime
$50
High Demand
0.6
Expand
$55
Assignment 2: Probability Analysis
A General Manger of Harley-Davidson has to decide on the size of a new facility. The GM has narrowed the choices to two: large facility or small facility. The company has collected information on the payoffs. It now has to decide which option is the best using probability analysis, the decision tree model, and expected monetary value.
Options:
Facility
Demand Options
Probability
Actions
Expected Payoffs
Large
Low Demand
0.4
Do Nothing
($10)
Low Demand
0.4
Reduce Prices
$50
High Demand
0.6
$70
Small
Low Demand
0.4
$40
High Demand
0.6
Do Nothing
$40
High Demand
0.6
Overtime
$50
High Demand
0.6
Expand
$55
Determination of chance probability and respective payoffs:
Build Small:
Low Demand
0.4($40)=$16
High Demand
0.6($55)=$33
Build Large:
Low Demand
0.4($50)=$20
High Demand
0.6($70)=$42
Determination of Expected Value of each alternative
Build Small: $16 $33=$49
Build Large: $20 $42=$62
See at bottom for the Statistical Terms review sheet.
Submit your conclusion in a Word document to the M4: Assignment 2 Dropbox byWednesday, August 31, 2016.
Assignment 2 Grading Criteria
Maximum Points
The diagram is accurate and labeled correctly. The diagram clearly illustrates the sequence of events and their probability of occurrences.
32
A step-by-step breakdown of the calculations for the chance of probability and respective payoff is clearly communicated. The results of the calculations are accurate.
28
A step-by-step breakdown of the calculations for expected value is clearly communicated. The results of the calculations are accurate.
20
Clear and concise statement explaining the decision and a description of elements that lead to the decision.
20
Total:
100
SAMPLING MEAN:
DEFINITION:
The term sampling mean is a statistical term used to describe the properties of statistical distributions. In statistical terms, the sample mean http://www.stat.yale.edu/Courses/1997-98/101/xbar.giffrom a group of observations is an estimate of the population meanhttp://www.stat.yale.edu/Courses/1997-98/101/mu.gif. Given a sample of sizen, considern independent random variables X1,X2…Xn, each corresponding to one randomly selected observation. Each of these variables has the distribution of the population, with mean http://www.stat.yale.edu/Courses/1997-98/101/mu.gifand standard deviationhttp://www.stat.yale.edu/Courses/1997-98/101/sigma.gif. The sample mean is defined to be http://www.stat.yale.edu/Courses/1997-98/101/xbardef.gif
WHAT IT IS USED FOR:
It is also used to measure central tendency of the numbers in a database. It can also be said that it is nothing more than a balance point between the number and the low numbers.
HOW TO CALCULATE IT:
To calculate this, just add up all the numbers, then divide by how many numbers there are.