For this discussion topic each student is required to have at least 2 postings: One answering at least one of the questions and a second responding to another student’s posting. Please select a question that has not been answered by the time you post your response. You can select any question to answer once all questions are answered. Please do not copy another student’s posting.
This discussion will close at midnight Sunday, September 4th.
1. Problem 2a, Textbook Page 29
How might analytics be used in the following situation?
a. Making and marketing a new product
2. Problem 4 (parts d, e, g and h only), Textbook Page 30
For each of the following scenarios, state whether descriptive, predictive, or prescriptive analytics tools would most likely be used.
d. A large service firm wishes to determine how to invest the cash received from its financial product to achieve the best return.
e. A logistics company wants to better understand the relative profitability of its numerous customers over the past three years.
g. An automobile company would like to determine the number of vehicles it could sell next year based on the proposed price.
h. A baseball team would like to set ticket prices for different sections in its stadium to attract the highest number of fans throughout the season.
3. Suppose that a firm can produce a part it uses for $350 per unit, with a fixed cost of $60,000. The company has been offered a contract from a supplier that allows it to purchase the part at a cost of $450 per unit, which includes transportation.
a. If the anticipated production volume is 980 units of the part, compute the total cost of manufacturing and the total cost of outsourcing.
b. What is the best decision?
4. A bank developed a model for predicting the average checking and savings account balance as
Balance = -9,250 + 280 X age + 1000 X years of education + 0.15 X yearly earnings
a. Explain how to interpret the numbers in this model.
b. Suppose that a customer is 50 years old, is a college graduate (so that years of education = 16) and has a yearly earnings of $150,000. What is the predicted bank balance?
5. A company is preparing to set the price on a new product. Demand is thought to depend on the price and is represented by
D = 1650 – 3.2P
The accounting department estimates that the total costs can be represented by
C = 4540 + 5.5D
Develop a model for the total profit in terms of the price, P.