Ask Your question
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!
Search & Filtering
“We bring in the supervisors of budget areas, we tell them that we want their frank opinion, but most of them just sit there and nod their heads. We know they are not coming out with exactly what they feel. I guess budget scares them”.
Explain why managers may be reluctant to participate fully in setting budgets, indicating the negative side effects, which may arise from the imposition of budgets by senior management.
No oil 0.8
It is possible for WLL to hire a firm of international consultants to carry out a complete survey of the site. WLL has used the firm many times before and has made the following estimates:
1. If there really is oil, then there is a 95% chance that the report will be favourable.
2. If there is no oil then there is only a 10% chance that the report will indicate that there is oil.
The following additional information is also provided:
• The cost of drilling is Sh.10 million.
• The value of the benefits if oil is found is Sh.70 million
• The cost of obtaining information is Sh.3 million.
a) Advise the company on whether to acquire additional information from the consultants
b) Compute the value of imperfect information.
(ii) After analyzing the cost of various options for obtaining bolts, the company recognizes that ,Although the lead time is 3 days, the demand during lead time often varies. The company has kept very careful records and has determined that lead time is normally distributed with a standard deviation of 1.2 unit.
a) What Z value would be appropriate for a 95% service level?
b) What safety stock should the company maintain if it wants a 95% service level?
c) What is the adjusted ROP for the bolts?