Applied Business Research & Statistics. Bell Computer Company

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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? Use the Excel Function to calculate the reorder point based on a normal distribution. Research Excel to determine which function is the correct function to use for the reorder point based on a normal distribution.
Be sure to show your work in the Excel Spreadsheet.
Format your assignment consistent with APA format with at least one (1) scholarly, peer-reviewed reference and one reference from the assigned readings (textbook).
An Introduction paragraph (Do Not Write the word Introduction to begin the body of the paper – Use the title of the paper instead). There should be a thesis statement in the introduction paragraph.
At least one (1) Level One Heading
Conclusion Heading.
Submit the Excel Spreadsheet and the Paper. You must submit the spreadsheet to show your calculations.

CONTENT:

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Case Study – Bell Computer Company
Your Name
Subject and Section
Professor’s Name
November 18, 2019

The utilization of statistics and probability is an indispensable process in making business decisions. It allows the management to be able anticipate with a reasonable degree of certainty, the profitability and the survivability of the business itself. Thus, it is important for any future entrepreneur, manager, or executive to be able to conduct data analysis of fundamental business mathematics. In this article, the cases of (1) Bell Computer Company and (2) Kyle Bits and Bytes would be analyzed. The succeeding sections would focus on understanding concepts such as expansion and re-ordering. All in all, the author of this article believes that an understanding of these basic concepts is a critical tool in business decision making.
Case 1
The Bell Computer Company Case
The first case illustrates a dilemma in the decision-making of the management of the Bell Computer Company (Bell Computers) as to what kind of expansion should it undertake. In each of the scales (medium and large), the company is expecting a demand growth with differing probabilities, which are given as:
Demand
Probability
Low
0.2
Medium
0.5
High
0.3

Accordingly, a computation of the given data would show the following results for the different expansions:
Expansion
Demand
Profits
Medium Scale Expansion
Low
$ 50,000.00
Medium
$ 150,000.00
High
$ 200,000.00
Large Scale Expansion
Low
$ –
Medium
$ 100,000.00
High
$ 300,000.00

In line with the dilemma faced by the management, it could be seen that despite the potentials of large-scale expansions, it also increases the risks since only in cases where there is ‘high demand’ where the profits would be greater to medium scale. In fact, the profits would be lower in cases of low and medium demand levels as compared to a medium-scale expansion.
Expected Values

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