# Decision-Making Models - Math Problem Example

Summary
This research is being carried out to evaluate and present the results that were generated with the use of Monte Carlo simulation. According to Heizer and Render, Monte Carlo simulation involves carrying out chance related experiments using random sampling techniques…

## Extract of sample "Decision-Making Models"

Download file to see previous pages The researcher states that the amount of inventory that Company A needs to order can be determined with the use of economic order quantity (EOQ) model. According to Williamson EOQ models are used for identifying the optimal order quantity. In order to do this the model minimizes the sum of certain costs that vary with order size and the frequency of orders. Williamson (2012) describes three order size models – the basic economic order quantity (EOQ) model; the economic production quantity (EPQ) model; and the quantity discount model. The basic EOQ model is used to find the order size that would minimize company A’s total annual cost. The formula and the calculations follow.
Q0 = √(2DS/H)
Where,
Q0 is the order quantity in units
D is the annual demand in units
S is the order cost for each order made
H is the holding or carrying the cost for each unit of inventory per year
Company A’s information is as follows:
- Annual demand (D) is 18,000 units per annum
- Ordering cost (S) is \$38 per order
- Holding cost (H) is 26% of the cost of the inventory which is \$12 per unit
Q0 =  √[(2 x 18,000 x \$38)/(0.26 x \$12)]
= √(1,368,000/3.12)
= √438461.54 = 662 units
= 662 units
The results indicate that the economic order quantity that will minimize total annual cost is 662 units per order.
Company A produces the goods that it sells and so the economic production lot size model is the most appropriate model for use in this scenario (Williamson 2012). The formula for performing the calculations that provide the results is as follows:
Qp = √(2DS/H) √[p/(p-u)]
Where,
Qp is the economic run quantity
p is the production or delivery rate
u is the usage rate

Qp = √[(2 x 15,000 x \$84)/(0.28 x \$19)] √[60,000/(60,000-15,000)]
Qp = √(2,520,000/5.32) √1.33
Qp = 699.25 x 1.15
Qp = 791
The results indicate that the economic production lot size that will minimize total annual cost id 791 units per production run. ...Download file to see next pagesRead More
Cite this document
• APA
• MLA
• CHICAGO
(“Decision-Making Models Math Problem Example | Topics and Well Written Essays - 4000 words”, n.d.)
Decision-Making Models Math Problem Example | Topics and Well Written Essays - 4000 words. Retrieved from https://studentshare.org/statistics/1403559-quantative-analysis-for-business
(Decision-Making Models Math Problem Example | Topics and Well Written Essays - 4000 Words)
Decision-Making Models Math Problem Example | Topics and Well Written Essays - 4000 Words. https://studentshare.org/statistics/1403559-quantative-analysis-for-business.
“Decision-Making Models Math Problem Example | Topics and Well Written Essays - 4000 Words”, n.d. https://studentshare.org/statistics/1403559-quantative-analysis-for-business.
Click to create a comment or rate a document
fc
fconn added comment 2 months ago
Student rated this paper as
I didn’t know how to start my text. "Decision-Making Models" helped me out a lot! Especially the list of introduction was valuable.

## CHECK THESE SAMPLES OF Decision-Making Models

### Decision making models

...? Decision Making Models Introduction People from time to time need to make decisions. Decision making processes cover crucial aspects of human lives given restricted time for formulating policies and decisions, and addressing issues. People enjoy certain degrees of discretion in revising, planning and implementing decisions. This means that individuals must engage in decision-making processes. Models proposed by various scholars govern these processes. The decision-making models have the...
5 Pages(1250 words)Research Paper

### Decision making models

...?Decision making is one of the most- if not the most important of all managerial activities (Schultz et al 2004:163). However, decision making is notonly restricted to managers but is one of the primary responsibilities of all employees since the quality of decisions made directly affect their day to day operations, rewards and job satisfaction as well as the viability of the organisation as a whole. Against this background, this essay seeks to critically describe two models of decision making namely: Vroom-Yetton- Jago normative decision making model as...
4 Pages(1000 words)Outline

### Models of Decision Making

...kind of reasoning is applied, a different answer emerges-an answer that is somewhat different from what was earlier generalized, based only on simple mathematical analyses. 3. From each activity arise different principles that demonstrated how, in decision- making, detailed and methodical reasoning is imperative. Take as an example the first activity shown, wherein at first analysis, most individuals would answer Option 1 rather than Option 2. However, upon a closer analysis of the question and the relationship between the given information in the problem, the response did make sense-that Option 2 is the sounder choice rather than Option 1. What this activity also shows is that in...
2 Pages(500 words)Essay

### Models of Decision Making

...Decision Making Models From time to time, there is always a need to innovate, in order to increase profitability in the organization that one works with. This was exactly the idea I had in mind when I decided to outsource the services of an Indian firm in revising the structure of one of our database. I have heard and read a good amount of news, extolling the virtues of outsourcing and the decision was easy to make. It appeared promising from the outset: the cost is a fraction of what we would have to spend and the programmers seemed capable. The problem came when the project was finished and the quality was not what we expected it to be. Although, the offshore firm was willing to do revisions, there were issues of quality control... have...
2 Pages(500 words)Essay

### Clinical and Ethical Decision-Making Models

...﻿Clinical and Ethical Decision-Making Models Abstract The aim of the work is to consider the nursing case study, and to make the best decision in the critical situation described through the use of one of the decision-making models. The key words are: decision-making, model, cognitive continuum model, intuitive model, outcomes, values, probabilities. Nursing case study The case study to be considered in this work is very complex and involves a number of ethical and clinical issues for the discussion. However, the...
5 Pages(1250 words)Essay

### Decision making models

...Running head: DECISION MAKING MODELS Decision Making Models Affiliation October 2008 Decision making remains one of the more difficult jobs of a manager. Information conditions have helped managers communicate and hand out information; on the other hand they have provided only inadequate assistance for management decision making (Kenneth, 1998). By using the cost benefit analysis techniques, our organization would be able to solve/ tackle problems that might otherwise appears massive overwhelming, and extremely difficult. This tool give our organization: An initial point...
3 Pages(750 words)Essay

### Consumer decision-making models

...1. The traditional problem solving model of consumer decision making is based on a step by step logical and rational approach to take any decision. This model generally hold true for buying products where customer recognized the need for the product, collects information about its availability, types and price ranges, buys the product and uses it. However, in case of holiday decision making, the process is not that logical and uniform. The need for a holiday is a luxury for most people and hence their decisions are very flexible. The decision to go on a holiday is dependent as much on...
2 Pages(500 words)Assignment

### Models of Decision-Making

...Models of decision-making Decision making is a critical process in any organization. It involves identification of the problem, evaluation of the available decision alternatives and selection of the best alternative among the available alternatives. Some activities involved in the process include the information collection process, analysis process and choice activity. Some decisions may be simple to make while others are complex since they require a lot of information gathering and complex analysis. Examples of decision making models include the...
1 Pages(250 words)Research Paper

### Decision-Making Models And Leadership Theories Of Wal-Mart

12 Pages(3000 words)Research Paper

### Consumer Decision-Making Models

...﻿ Consumer Decision-Making Models Introduction Consumer behaviour is the emotional and psychological processes as well as the observable actions of buyers during the process of searching for information, purchasing and reacting after consumption of a particular product. It involves the manner consumers decide on how to use their resources like time, money and energy on the purchase and use of interrelated products. The aspects of consumer behaviour involves the overall purchasing action that is very clear to the marketer and the process of arriving at the decision to buy that involves the interaction of various complicated variables that are difficult for the...
12 Pages(3000 words)Essay
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

## Let us find you another Math Problem on topic Decision-Making Models for FREE!

This Website is owned and operated by Studentshare Ltd (HE364715) , having its registered office at Aglantzias , 21, COMPLEX 21B, Floor 2, Flat/Office 1, Aglantzia , Cyprus.
• FAQ
• Blog
• New Essays
• Essays
• Miscellaneous