### Southern gas company is preparing to make a bid

Assignment Help Operation Management
##### Reference no: EM1387557

Southern Gas Company ( SGC) is preparing to make a bid for oil and gas leasing right in a newly opened drilling area in the Gulf of Mexico. SGC is trying to decide whether to place a high bid of \$ 16 million or a low bid of \$ 7 million. SGC expects to be bidding against its major competitor, Northern Gas Company ( NGC) and predicts NGC to place a bid of \$ 10 million with probability 0.4 or a bid of \$ 6 million with probability 0.6. Geological data collected at the drilling site indicates a 0.15 probability of the reserves at the site being large, a 0.35 probability of being average, and a 0.50 probability of being unusable. A large or average reserve would most likely represent a net asset value of \$ 120 million or \$ 28 million, respectively, after all drilling and extraction costs are paid. The company that wins the bid will drill an exploration well at the site for a cost of \$ 5 million. a. Develop a decision tree for this problem. b. What is the optimal decision according to the EMV criterion?

### Previous Q& A

#### Barriers to services-planning-funding

Identify three barriers to services, planning, funding, or empowerment in a selected aspect of human services, and thoroughly discuss how applications of technology could be used as a means to overcome each of these barriers.

#### Compute the final equilibrium temperature

Compute the final equilibrium temperature.

#### What is the final speed of the crate

A 51kg crate, starting from rest, is pulled across a floor with a constant horizontal force of 250N. For the first 10.5m the floor is frictionless, and for the next 10.5m the coefficient of friction is 0.18. What is the final speed of the crate af..

#### Employee may be initiating ip theft

Discuss some possible clues that might tip off a manager that an employee may be initiating IP theft.

#### Why the kinetic frictional force is zero

A 1x10^2-kg crate is being pushed across a horizontal floor by a force that makes an angle of 30.0° below the horizontal. The coefficient of kinetic friction is 0.25. What must be the magnitude of, so that the net work completed by it and the kine..

#### Fuel economy calculations to be altered

In an article entitled "Fuel Economy Calculations to Be Altered," James R. Healey indicated that the government planned to change how it calculates fuel economy for new cars and trucks.

#### Middle of counseling sessions

Critically discuss the ethical concerns when expectations and or ground rules are changed in the middle of counseling sessions? Critically discuss the possible consequences for the client and or provider when this happens?

#### A company is negotiating with a potential supplier

A company is negotiating with a potential supplier for the purchase of 100,000 widgets. The company estimates the suppliers variable costs are \$5 per unit and that the fixed costs

#### Recommend a possible explanation

Codons with U or C as the second nucleotide, for example, tend to specify hydrophobic amino acids. Can you recommend a possible explanation for this phenomenon in terms of the early evolution of the protein synthesis machinery?

#### What is the intensity level

A loudspeaker at a rock concert generates 10-2 W/m2 at 18 m at a frequency of 1 kHz. Suppose that speaker spreads its energy uniformly in all directions. What is the intensity level at 18.00m.

### Similar Q& A

#### Elucidate what is this product availability

this product hangs up also needs resetting every 200 hours. On average about 45 minutes is needed to reset this product. Elucidate what is this product's availability.

#### A worker picks up boxes from the floor and places

A worker picks up boxes from the floor and places them on a conveyor. This activity will occur every 30s. The boxes, weighing 23 lb

#### Obtaining a measure of overall performance

Cunningham Performance Auto, Inc. modifies 375 autos per year. The manager, Peter Cunningham, is interested in obtaining a measure of overall performance.

#### Determine whether zero population growth figure for urban us

Growth figure for urban U.S. residents also is true for rural U.S. residents on basis of sample data. 9.49 Brokers generally agree that bonds are a better investment.

#### Explain why would you decentralize hrm also have management

Explain why would you decentralize HRM also have HRM managers reporting to line managers with organizational structure.

#### How hospital-billing auditor has been examining patient bill

A hospital-billing auditor has been examining patient bills. Although almost all bills contain some errors, the defect rate has been 16percent.

#### What order quantity minimizes total annual inventory cost

They sell 100 printers per month. The manufacturer has offered the following price schedule. What order quantity minimizes total annual inventory cost?

#### What is the economic order quantity

What is the economic order quantity? Calculate the annual inventory holding costs based on the average inventory level and annual holding cost per box

#### Determine how much information a firm is obliged

Determine how much information a firm is obliged to tell a potential strategic alliance partner about what it expects to learn from the cooperative arrangemen

#### Draft a dfd for patient admission in a hospital

Information flow diagrams provide a way for the system to be broken down into manageable parts beginning with a general context and moving into more detail. Draft a DFD (Information flow diagrams) for Patient admission in a hospital.

#### The safety stock is ten percent of expected demand

A bottling plant fills 2,400 bottles every two hours. The lead time is 40 minutes and a container accommodates 120 bottles

#### Should he lower her advertising budget

Cloris employs one sales representative at a salary of \$40,000 per year. If Johnson reduces advertising budget by \$20.000 she expects to 75 fewer units. Should he lower her advertising budget.