James Raymond
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#1
Report Thread starter 4 months ago
#1
Skylark Manufacturing Ltd has been contracted by Oracle PPE Ltd
to supply polycarbonate visors needed for production of face
shields under the following terms:
A batch of 200,000 visors will be delivered to Oracle in one month.
Also in three months, there is a possibility that Oracle will take
delivery of additional 100,000 visors by giving Skylark either 30
days’ notice or additional 150,000 visors by giving just 15 days’
notice. The probabilities for ordering additional visors by giving 30
days’ notice is 0.6 and 15 days’ notice is 0.7.
Oracle pays £5 for each visor that it purchases. Skylark
manufactures the visors using a batch process and incurs a fixed
setup cost of £250,000 for any manufacturing batch run,
regardless of the size of the run. In addition, there is a marginal
manufacturing cost of £2 per visor. If Skylark receives only 15
days’ notice to deliver additional visors, it will incur an additional
cost of £0.50 per visor for running overtime production.
Skylark must decide if it should manufacture:
 All 350,000 visors in one batch; or
 All 300,000 visors in one batch; or
 Only 200,000 visors now and manufacture the additional visors
only after receiving a notice from Oracle.
 If Skylark manufactures additional visors now but receives no
order notice from Oracle in future, then the manufacturing
cost for additional visors will be totally lost.
(i) Draw a decision tree for the decision that Skylark
Manufacturing Ltd faces. (6 marks)
(ii) Using decision tree analysis determine your
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Muttley79
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#2
Report 4 months ago
#2
(Original post by James Raymond)
Skylark Manufacturing Ltd has been contracted by Oracle PPE Ltd
to supply polycarbonate visors needed for production of face
shields under the following terms:
A batch of 200,000 visors will be delivered to Oracle in one month.
Also in three months, there is a possibility that Oracle will take
delivery of additional 100,000 visors by giving Skylark either 30
days’ notice or additional 150,000 visors by giving just 15 days’
notice. The probabilities for ordering additional visors by giving 30
days’ notice is 0.6 and 15 days’ notice is 0.7.
Oracle pays £5 for each visor that it purchases. Skylark
manufactures the visors using a batch process and incurs a fixed
setup cost of £250,000 for any manufacturing batch run,
regardless of the size of the run. In addition, there is a marginal
manufacturing cost of £2 per visor. If Skylark receives only 15
days’ notice to deliver additional visors, it will incur an additional
cost of £0.50 per visor for running overtime production.
Skylark must decide if it should manufacture:
 All 350,000 visors in one batch; or
 All 300,000 visors in one batch; or
 Only 200,000 visors now and manufacture the additional visors
only after receiving a notice from Oracle.
 If Skylark manufactures additional visors now but receives no
order notice from Oracle in future, then the manufacturing
cost for additional visors will be totally lost.
(i) Draw a decision tree for the decision that Skylark
Manufacturing Ltd faces. (6 marks)
(ii) Using decision tree analysis determine your
Upload your working so far ...
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James Raymond
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#3
Report Thread starter 4 months ago
#3
(Original post by Muttley79)
Upload your working so far ...
[img=112x200]https://scontent.xx.fbcdn.net/v/t1.15752-0/p280x280/120998757_676057813031567_906394 5862366272679_n.jpg?_nc_cat=100& _nc_sid=ae9488&_nc_ohc=pu32kvuek c0AX9vm7tQ&_nc_ad=z-m&_nc_cid=0&_nc_ht=scontent.xx&t p=6&oh=47220e67d6a8229d38523fe66 2b3bec0&oe=5FA3230A[/img]
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James Raymond
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#4
Report Thread starter 4 months ago
#4
(Original post by Muttley79)
Upload your working so far ...
Name:  decision tree.jpg
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James Raymond
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#5
Report Thread starter 4 months ago
#5
(Original post by James Raymond)
Name:  decision tree.jpg
Views: 6
Size:  222.9 KB
Any help would be great cheers, not sure if i've got it right. Thank you
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