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Quantitative Techniques For Management ASSIGNMENT

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22 views2 pages

Quantitative Techniques For Management ASSIGNMENT

Uploaded by

pushpendrachaudhary21
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Quantitative techniques for management

CASELET-1
XYZ Electronics is a mid-sized consumer electronics company that has been
successful in the market for over a decade. The company is known for its
innovative products and strong brand reputation. Recently, the management
team at XYZ Electronics has been considering the launch of a new line of smart
home devices, which would include smart speakers, smart lighting, and home
automation systems. The market for smart home devices is growing rapidly, but
it is also becoming increasingly competitive.
The management needs to decide whether to launch the new product line. The
decision comes with significant risks, as the company would need to invest
substantial resources into research and development, marketing, and production.
However, if successful, the new product line could greatly enhance the
company’s market position and profitability.
Decision Alternatives:
Launch the New Product Line: Invest in the development and marketing of
the new smart home devices and bring them to market.
Delay the Launch: Postpone the launch to gather more market data and refine
the product offerings.
Do Not Launch: Avoid the risk and maintain focus on the company’s existing
product lines.
Potential Outcomes and Probabilities:
Based on market research and expert opinions, XYZ Electronics has estimated
the following potential outcomes and their associated probabilities:
High Market Demand: The new product line is a hit in the market, leading to
significant profits.
Probability: 0.4
Estimated Profit: $10 million
Moderate Market Demand: The product line achieves moderate success,
leading to average profits.
Probability: 0.35
Estimated Profit: $4 million
Low Market Demand: The product line fails to capture market interest, leading
to losses.
Probability: 0.25
Estimated Loss: $3 million
Additional Considerations:
If the company decides to delay the launch, it incurs a cost of $1 million but
could potentially increase the probability of success by refining the product.
However, delaying also risks losing market share to competitors. If the company
decides not to launch the new product line, it avoids the risk entirely but misses
out on the potential market opportunity.
Apply the Expected Value (EV), Expected Opportunity Loss (EOL), and Expected
Value of Perfect Information (EVPI) approaches to analyze the decision
alternatives. Consider how each decision alternative impacts the company’s
overall strategy and risk profile.
Based on your analysis, recommend whether XYZ Electronics should launch the
new product line, delay the launch, or not launch at all. Provide a clear
justification for your recommendation.

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