Exam 2
Module 5: Profit Model
1. Possible values for Profit versus revenue (ie which can be negative)
2. Profit model, How calculate profit : From a set of data, calculate
Profit, Revenue, Fixed costs, variable costs
3. Profit Calculation
Including converting time periods, such as monthly data into daily
date.
Converting Profit to a different time period. ( day, month, year)
4. Break even; How calculate and what it means
5. Contribution Margin, calculation and what it means ( ie contribute to
paying off FC or profit )
The Profit Model
The Profit Model and Fixed versus
variable Expenses
Updated Profit Model when demand
and production are not equal:
6. Crossover point: calculation
7. Understand negative crossover
Calculating the crossover point
When Cross over is negative ( at
bottom of story)
The Profit Model and Calculating the
crossover point
Updated Profit Model when demand
and production are not equal:
8. Profit and quantity at crossover
9.
How demand being greater or less than production influences Profit
calculation
Break Even, when profit = 0
Contribution Margin
Module 6: Simulation
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
4
Video
Why do we use simulations: Purpose, benefits and Why we use simulation;…Video
limitations of simulation
Understand probability in percent terms and ranges. Review: Probability in decimal versus percent form
Decimal versus percent form
Variable to use simulation for.
Why we use simulation;…Video
Discrete versus continuous variable, deterministic Why we use simulation;…Video
versus probabilistic
How to simulate a discrete variable?
Coin Flip Sim
Apply to a business situation and interpret results
Video: Donut Simulation
Convert frequency data into a probability
1. Calculate probabilities
Convert frequency data into cumulative probability 2 Cumulative Probabilities
Converting a random number to a value
3_Ranges for different outcomes
Using Rand and Vlookup to create a simulation in 4_Put into Vlookup
Excel. Given a Vlookup table, understand what value
will be returned.
Vlookup, how it works
Module 1 Excel Vlookup
Module 7: Decision Making under Ignornace
1. States of Nature, Decision Alternatives, Outcomes or Payoff,
Know what these are, what they represent and where they go on
payoff table.
Decision making under Certainty, Ignorance, and Risk. Know how they are
the same and different and how to solve for each of them.
2. Decision Making under Certainty, what is it?
Video
States of Nature, Decision
Alternatives, Outcomes or Payoff,
Decision Making under Certainty
3. Decision Making under Ignorance
a. Maximax , what type of person chooses this method and
how to use
b. Maximin, what type of person chooses this method and
how to use
c. LaPlace, what type of person chooses this method and how
to use
d. Opportunity Loss Table (Regret Table), and Minimax Regret
method.
Always check if I have given you the Regret table or not.
4. Any Excel functions used in class exercises,
a. Min, Max, If,
Module 8 : Decision Making under Risk
Decision Making under Risk : What all the following abbreviations mean
and how to solve for them
a. EV , Expected Return
b. EOL
c. EVUII,
d. EVUPI,
e. EVPI,
5. Decision Trees,
How they compare to the payoff tables and how to solve a decision
tree
Being able to solve all values on a decision tree
6. Other expected value calculations , when using to determine an
amount of something
7. Combining probabilities and Expected values to determine an
amount
Excel Functions
1. Count
2. What adding the if and ifs to a function allows you to do
3. Now/today
4. Freezing top pain
5. Sumifs, countifs, maxifs, minifs, averageifs
Module 9: Bayes Theorem and Histograms
1. Meaning of |, P, ∩
2. Recognize Bayes’ Theorem and definition
3. What do probabilities of all states of nature add to?
4. What do probabilities for all possibilities in a given condition add to?
5. Difference between a histogram and a bar chart
6. How Spam filters work
7. How Market Research uses Bayes Theorem
Decision Making under Ignorance
Decision Making under Ignorance:
maximax, maximin. laplace
Decision Making under Ignorance:
maximax, maximin. laplace
Decision Making under Ignorance:
maximax, maximin. laplace
Regret Table and Minimax regret
Using Excel to create Maximax,
Maximin, Laplace, using Excel
Funcations Min, Max and IF
Decision Making under Risk : EV,
EVUPI
Decision Making under Risk : EOL
Decision Making under Risk : EVUII
Decision Making under Risk : EV,
EVUPI
Decision Making under Risk : EVPI
Decision Tree
Other examples of using
Expected Value Calculation
Videos at end of module 8
Videos at end of module 8
Videos at end of module 8
Videos at end of module 8
Videos at end of module 8
Bayes Theorem
Bayes Theorem
Bayes Theorem, Horse Racing
Bayes Theorem, Horse Racing
Creating Histograms on Excel
Spam Filter
Market research
the