OIDD 101 Lecture Notes - Lecture 11: Confidence Interval, Random Variable, Bauer Hockey
13 Apr 2015
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Opim 101 - operations & information management - lecture 11: decision making under. Ex) itech computer is a manufacturer of notebooks - the economic lifetime of a new notebook model, ipal x, is estimated to be short and will not exceed 6 months. Itech produces notebooks in large batches at its facilities in south-east asia. Production and delivery lead times are long, and itech has to determine the production quantity for ipal x well in advance of selling season. It will not be able to change its production plan once a more certain market information is obtained. For ipal x notebook, the manufacturing cost is estimated to be , and the selling price will be set at . Itech has a partnership agreement with a discount retail chain which will buy the unsold notebooks for . At the time when production volume decision has to be made, itech has to rely on estimates provided by its marketing department.
