Due Date: 11:59 p.m. EST, Sunday of Unit 7 Points: 100
Overview:
Steve’s Mountain Bicycle Shop is considering three options for its facility next year. Steve can expand his current shop, move to a larger facility, or make no change. With a good market, the annual payoff would be $76,000 if he expands, $90,000 if he moves, and $40,000 if he does nothing. With an average market, his payoffs will be $30,000, $41,000, and $15,000, respectively. With a poor market, his payoff will be –$17,000, –$28,000, and $4,000, respectively. This assignment will explore Maximax, Minimax, and Maximin using this scenario for Steve’s Mountain Bicycle Shop.
Instructions:
• Create an Excel Document that shows which options Steve should pick in eachof the below situations:
o Maximax,o Maximin,o Equally likely,o Option if Steve uses criterion of realism at α = 0.4 (Hurwicz),o Minimax
• The table(s) should be clearly presented and labeled. It should includeinformation on the possible outcomes as well as the best choice in each of theabove listed.
• You may be creative in the presentation, so test your formatting skills!
Requirements:
• Microsoft Excel file
Be sure to read the criteria by which your work will be evaluated before you start and again after before you submit.
BUS522 – Financial Tools for Managers
Steve’s Mountain Bicycle Shop
Evaluation Rubric for Steve’s Mountain Bicycle Shop Assignment
CRITERIA Deficient Needs Improvement
Proficient Exemplary
(0-35 Points) (36-47 Points) (48-59 Points) (60 Points) Maximax/Maximin/Equally Likely/Minimax
Missing, or incomplete.
Complete but showing inaccurate data.
Complete and showing all or mostly correct.
All data correct, formatting has been applied to outputs.
(0-11 Points) (12-15 Points) (16-19 Points) (20 Points) Criterion of Realism
Missing, or incomplete.
Complete but showing inaccurate data.
Complete and showing all or mostly correct.
All data correct, formatting has been applied to outputs.
Presentation Formatting not applied, output unclear.
Formatting applied but output is unclear and unorganized.
Clearly presented, answers to Steve’s questions clearly identifiable.
All data is clearly laid out and presented in a publish quality format.
