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## Electronic Timing System for Olympics Case Assignment

Order ID:89JHGSJE83839Style:APA/MLA/Harvard/ChicagoPages:5-10

Instructions:Electronic Timing System for Olympics Case Assignment

Read Case 6.3: Electronic Timing System for Olympics on pages 275-276 of the textbook. For this assignment, you will assess and use the correct support tool to develop a decision tree as described in Part “a” of

Case 6.3. Analyze and apply the best decision making process to provide answers and brief explanations for parts “a”, “b”, “c”, and “d”. The answers and explanations can be placed in the same Excel document as the decision tree.

- Develop a decision tree that can be used to solve Chang’s problem. You can assume in this part of the problem that she is using EMV (of her net profit) as a decision criterion. Build the tree so that she can enter any values for
p1, p2, andp3(in input cells) and automatically see her optimal EMV and optimal strategy from the tree.- If p2 = 0.8 and p3 = 0.1, what value of p1 makes Chang indifferent between abandoning the project and going ahead with it?
- How much would Chang benefit if she knew for certain that the Olympic organization would guarantee her the contract? (This guarantee would be in force only if she were successful in developing the product.) Assume
p1= 0.4,p2= 0.8, andp3= 0.1- Suppose now that this is a relatively big project for Chang. Therefore, she decides to use expected utility as her criterion, with an exponential utility function. Using some trial and error, see which risk tolerance changes her initial decision from “go ahead” to “abandon” when
p1= 0.4,p2= 0.8, andp3= 0.1.In your Excel document,

- Develop a decision tree using the most appropriate support tool as described in
Part a.- Calculate the value of p1 as described in
Part b. Show calculations.- Calculate the possible profit using the most appropriate support tool as described in
Part c. Show calculations.- Calculate risk tolerance as described in
Part d. Show calculations.Case 6.3

Sarah Chang is the owner of a small electronics company. In six months, a proposal is due for an electronic timing system for the next Olympic Games. For several years, Chang’s company has been developing a new microprocessor, a critical component in a timing system that would be superior to any product currently on the

market. However, progress in research and development has been slow, and Chang is unsure whether her staff can produce the microprocessor in time. If they succeed in developing the microprocessor (probability p1), there is an excellent chance (probability p2) that Chang’s company will win the $1 million Olympic contract. If

they do not, there is a small chance (probability p3) that she will still be able to win the same contract with an alternative but inferior timing system that has already been developed.

If she continues the project, Chang must invest $200,000 in research and development. In addition, making a proposal (which she will decide whether to do after seeing whether the R&D is successful) requires developing a prototype timing system at an additional cost. This additional cost is $50,000 if R&D is successful (so that she can develop the new timing system), and it is $40,000 if R&D is unsuccessful (so that she needs to go with the older timing system). Finally, if Chang wins the contract, the finished product will cost an additional $150,000 to produce.

- Develop a decision tree that can be used to solve Chang’s problem. You can assume in this part of the problem that she is using EMV (of her net profit) as a decision criterion. Build the tree so that she can enter any values for p1, p2, and (in input cells) and automatically see her optimal EMV and optimal strategy from the tree.
- If p2 = 0.8 and p3 = 0.1, what value of p1 makes Chang indifferent between abandoning the project and going ahead with it?
- How much would Chang benefit if she knew for certain that the Olympic organization would guarantee her the contract? (This guarantee would be in force only if she were successful in developing the product.) Assume p1 = 0.4, p2 = 0.8, and p3 = 0.1.
- Suppose now that this is a relatively big project for Chang. Therefore, she decides to use expected utility as her criterion, with an exponential utility function. Using some trial and error, see which risk tolerance changes her initial decision from “go ahead” to “abandon” when p1 = 0.4, p2 = 0.8, and p3 = 0.1.

RUBRIC

Excellent Quality95-100%

Introduction45-41 points

The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.

Literature Support91-84 points

The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.

Methodology58-53 points

Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.

Average Score50-85%

40-38 points

More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.

83-76 points

Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.

52-49 points

Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.

Poor Quality0-45%

37-1 points

The background and/or significance are missing. No search history information is provided.

75-1 points

Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.

48-1 points

There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met

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