Decision making problems # An Informatics Corporation summarizes international financial information reports (on weekly basis).

Prints sophisticated data and forecasts which are purchased weekly by mutual funds, banks and insurance companies. This information is very expensive and the demand for the report is limited to a maximum of 30 units per week. The possible demands are 0, 10, 20 or 30 per week. The profit per report sold is Rs. 30 and the loss per report unsold at the end of a week is Rs. 20. No production of extra reports during a week is possible. Further, there is penalty cost of Rs. 250, for not meeting demand. Unsold reports cannot be carried over to the next week. Using payoff table, find out the number of reports to be produced if: i) Maximin or pessimistic strategy is adopted. ii) Maximax or optimistic strategy is adopted.

# A small industry finds from the past data, that the cost of making an item is Rs. 25, the selling price of an item is Rs. 30, if it is sold within a week and it could be disposed at Rs. 20 per item at the end of the week: Weekly Sales <=3 4 5 6 7 >=8 No. of weeks 0 10 20 40 30 0

Find the optimum number of items per week should the industry produce.

Forecasting: Sales (Rs. In lakh) 6 8 9 5 4.5 9.5 y 6 8 9 5 4. 5 9. 5 4 2 7 x 3 4 6 4 2 5 24 4 168 180. 5 12.5 Working Capital (Rs. In ) 3 4 6 4 2 5 xy y2 x2 y-y x-x 18 36 9 -1 -1 32 64 16 1 0 54 81 36 2 2 20 25 16 -2 0 20.2 9 5 4 -2.5 -2 90.2 47.5 5 25 2.5 1 180 316 10 .5 .5 6 0 0
-

(xx^)2 1 0 4 0 4 1 10

(y-y-)*(xx-) 1 0 4 0 5 2.5 12.5

24 24

96 106

b a

1.25 2

-10 b 1.25 a 2 Forecast Sales for the Working Capital of Rs. 8,00,000.

x= y=

8 22