ANL355 Applied Operations Research Tutor-Marked Assignment January 2024 Presentation ANL355 Tutor-Marked Assignment TUTOR-MARKED ASSIGNMENT (TMA) This assignment is worth 24% of the final mark for ANL355 Applied Operations Research. The cut-off date for this assignment is 23 February 2024, 2355hrs. Note to Students: Compose your report using Microsoft Office Word, and save either as .doc or .docx (preferred). You are to include the following particulars in your submission: Course Code, Title of the TMA, SUSS PI No., Your Name, and Submission Date. Up to 25 marks of penalties will be imposed for inappropriate or poor paraphrasing. For serious cases, they will be investigated by the examination department. More information on effective paraphrasing strategies can be found on https://academicguides.waldenu.edu/writingcenter/evidence/paraphrase/effective. If your course involves programming, you are urged to read the following articles as well: https://wiki.cs.astate.edu/index.php/Plagiarism_in_a_Programming_Context https://www.turnitin.com/blog/plagiarism-and-programming-how-to-code-withoutplagiarizing-2 Use of Generative AI Tools (Allowed) The use of generative AI tools is allowed for this assignment. • You are expected to provide proper attribution if you use generative AI tools while completing the assignment, including appropriate and discipline-specific citation, a table detailing the name of the AI tool used, the approach to using the tool (e.g. what prompts were used), the full output provided by the tool, and which part of the output was adapted for the assignment; • To take note of section 3, paragraph 3.2 and section 5.2, paragraph 2A.1 (Viva Voce) of the Student Handbook; • The University has the right to exercise the viva voce option to determine the authorship of a student’s submission should there be reasonable grounds to suspect that the submission may not be fully the student’s own work. • For more details on academic integrity and guidance on responsible use of generative AI tools in assignments, please refer to the TLC website for more details; SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 2 of 4 ANL355 • Tutor-Marked Assignment The University will continue to review the use of generative AI tools based on feedback and in light of developments in AI and related technologies. Question 1 Steve Young, a Senior Sales Development Representative at a local wellness gift shop, is preparing for the upcoming Chinese New Year (CNY) Sales. He is considering two new CNY gift products: “Healthy Treats” and “Forever Youth”. While there is some overlap in their targeted customer groups, they are not complete substitutes for each other. With only one month remaining to make his purchasing decision, Steve faces a time constraint due to the long lead time required for production and shipping to Singapore. Once a decision is made, he cannot alter the purchase quantity. Additionally, Steve is required to order both types of products; he cannot opt to order just one of them. Steve needs to determine the specific purchasing quantity for each product within this month. The options are either 200 units, indicating a low demand estimation, or 500 units, indicating a high demand estimation. The unit purchasing cost for Healthy Treats is $50, and for Forever Youth, it’s $75. The market prices are fixed at $120 for Healthy Treats and $180 for Forever Youth. If any products remain unsold during the CNY sales, the disposal costs are $10 for Healthy Treats and $15 for Forever Youth. Based on a combination of experience and current trend analysis, Steve estimates a 30% chance that the demand for Healthy Treats will be high, exceeding 500 units. Before finalizing his purchasing decision, Steve has the option to conduct a regional market research test to gauge potential customer interest in Healthy Treats, as the budget does not allow for research on both products. This test will cost $2000. However, it cannot predict market demand with absolute certainty. Past results indicate a 15% chance of receiving a falsely positive signal in a weak market and a 20% chance of a falsely negative signal in a strong market. Despite the budget constraints limiting market tests to one product, there exists a notable correlation in demand between Healthy Treats and Forever Youth. A high demand for Healthy Treats corresponds to a 70% likelihood of strong demand for Forever Youth, regardless of the market test results. Similarly, if demand for Healthy Treats is low, there’s a 60% chance that Forever Youth will also experience weak demand, independent of the market research outcomes. (a) After reading all the information above, Steve is trying to conceptualize and evaluate his problem. Suppose you were Steve, and you are expected to describe and investigate the problem in a systematic way and provide answers for: • What were the key decisions? • What were the key uncertainties? Is it known? SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 3 of 4 ANL355 Tutor-Marked Assignment • What was the timing of decisions? • What was the timing of the resolution of uncertainty? (20 marks) (b) Formulate the problem using a decision tree. Include a screenshot of the completed decision tree in your submission. Additionally, specify the probabilities required to effectively solve and analyze the decision tree. (45 marks) (c) Solve the optimal decision strategy and give your overall recommendation. (15 marks) (d) In the context of the provided problem, discuss and explain how the optimal decision strategy is sensitive to key data factors, including the various uncertainties and data parameters involved. Detail how changes in these elements might influence the decisionmaking process. (20 marks) —- END OF ASSIGNMENT —- SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 4 of 4