# wk 3 expansion strategy and establishing a re order point

## Assignment Content

1. Purpose of Assignment

This assignment has two cases. You will select one of the two cases. The first case is on expansion strategy. Managers constantly have to make decisions under uncertainty. This assignment gives students an opportunity to use the mean and standard deviation of probability distributions to make a decision on expansion strategy. The second case is on determining at which point a manager should re-order a printer so he or she doesn’t run out-of-stock. The second case uses normal distribution. The first case demonstrates application of statistics in finance and the second case demonstrates application of statistics in operations management.

Assignment Steps

Resources: Microsoft ExcelÂ®,
Bell Computer Company Forecasts data set,
Case Study Scenarios

Write a 600-word report based on the selected case from the Bell Computer Company Forecasts data set and Case Study Scenarios.

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 BytesWhat should be the re-order point? How many HP laser printers should he have in stock when he re-orders from the manufacturer? For this case,
the probability approach to setting safety stock is used. You will review other methods of setting safety stock in OPS/571, for example, the fixed order quantity method utilizes continuous monitoring of inventory levels and when the level drops below the reorder point, a new order is placed. Due to continuous monitoring this usually results in lower amount of safety stock.
Do not use the fixed order quantity method for this case.

Format your assignment consistent with APA format.