Write a 600-word report based on the selected case from the Bell Computer Company Forecasts data set and Case Study Scenarios.
Include answers to the following:
Case 1: Bell Computer Company
- Compute the expected value for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of maximizing the expected profit?
- Compute the variation for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk or uncertainty?
Case 2: Kyle Bits and Bytes
What should be the re-order point? How many HP laser printers should he have in stock when he re-orders from the manufacturer? For this case, the probability approach to setting safety stock is used. You will review other methods of setting safety stock in OPS/571, for example, the fixed order quantity method utilizes continuous monitoring of inventory levels and when the level drops below the reorder point, a new order is placed. Due to continuous monitoring this usually results in lower amount of safety stock. Do not use the fixed order quantity method for this case.
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