BUS 640 Week Two Assignment Paper Essays - Pricing, Mathematics

BUS 640 Week Two Assignment Paper David A. Keith BUS 640 Managerial Economics Instructor Zhimin Huang September 27, 2017 Problem One A. Which of the twooptions should Patricia pursue if she wants to open a restaurant in a suburban area of Los Angeles? Calculate the total expected utility from each restaurant option and compare. Graph is not required. Describe your answer, and show your calculations. With giving information for solving problem one goes to show the importance of taste to the public just as much as cost for foods in opening her restaurant within LA regions. In addition, if we use weight score methods, where weight within 3 attributes are calculated will look like: The taste equals 6 divided by (6+2+3) equals 6 divided by 11 For locations equals 2 divided by (6+2+3) equals 2 divided by 11 For price equals 3 divided by (6+2+3) equals 3 divided by 11 The expected sum utilities within posting the restaurant for steaks in LA equals 6 divided by 11 times 80+2 divided by 11 times 55+ 3 divided by 11 times 65 equals 71.36. The expected sum utilities within posting the restaurant for pizza in LA equals 6 divided by 11 times 70+2 divided by 11 times 80+3 divided by 11 times 50 equals 66.36. Problem Two B. Which of the two options should she pick if she plans to open a restaurant in the Los Angeles metropolitan area? Describe your answer, and show your calculations. Within this problem, we see the importance of locations in opening a business which is just as important to Patricia as price is to her . This comes as much: The taste equals 2 divided by (6+2+3) equals 2 divided by 11 The locations equal 6 divided by (6+2+3) equals 6 divided by 11 The price equals 3 divided by (6+2+3) equals 3 divided by 11 The sum of these utilities expected comes with restaurant for steaks within the metropolitan regions, equal 2 divided 11 times 80+6 divided by 11 times 55+3 divided 11 times 65 equals 62.27. The sum of these utilities expected comes with restaurant for pizza within the metropolitan regions, equal 2 divided by 11 times 70+6 divided by 11 times 8+3 divided by 11 times 50 equals 70. Within these sums, it is seen that Patricia would be likely to go for restaurant for pizza in LA. Problem One C. Which option should she pursue if the probability of finding a restaurant venue in a suburban area can be reliably estimated as 0.7 and in a metropolitan area as 0.3? Describe your reasoning and show your calculations. The cause for searching in a suburban region for a business equals to point 7 The cause for searching in a metropolitan region for a business equals to point 3 This brings us to the restaurant for steaks equaling to .7 times 71.36 plus .3 times 62.27 equals 68.64. This brings us to the restaurant for pizza equaling to .7 times 66.36 plus .3 times 70 equals 67.45. it is seen that Patricia is better at opening the restaurant for steak because of expected utilities being high within that location. Problem One D. Provide a description of a scenario in which this kind of decision between two choices, based on weighing their underlying attributes, applies in the "real-world" business setting. Furthermore, what are the benefits and drawbacks, if any, to thismethod of decision making? In the world we live in today, weight measures in doubles of attributes based upon how those in charge of shipments and supplies handle their parts in delivering these goods through good attributes and services. These goes within reasons of dimension of qualities, cost of competitors, technology abilities and levels of service. Advantages of usage within methods of average weightiness scores within groups of underlined attributes sums up to be in multitudes of other evaluated means through lesser times. Negative results go with methods of these being tended to highlight means of what is important within being persuaded by others in bias and ending with negative results. In addition, these methods can also be subjected to assessment's then objective assessments because of loss of methods scientifically speaking weighting within measures. Problem Two