1. Copyright © 2005 Prentice Hall, Inc. All rights reserved.

2. Payoff Matrix for VISA VISA AMERICAN EXPRESS’ MARKETINGRESPONSE STRATEGY(IN MILLIONS OF $) CA1CA2CA3 S1131411 S291518 S3242115 S4181428 Exhibit QM–1

3. Copyright © 2005 Prentice Hall, Inc. All rights reserved. Regret Matrix for VISA VISA AMERICAN EXPRESS’ MARKETINGRESPONSE STRATEGY(IN MILLIONS OF $) CA1CA2CA3 S111717 S215610 S30013 S4670 Exhibit QM–2

4. Copyright © 2005 Prentice Hall, Inc. All rights reserved. Decision Tree and Expected Values for Renting a Large or Small Retail Space Exhibit QM–3

5. Copyright © 2005 Prentice Hall, Inc. All rights reserved. The Breakev en Analysis BE = [TFC/(P-VC)] Exhibit QM–4 A technique for identifying the point at which total revenue is just sufficient to cover total costs

6. Copyright © 2005 Prentice Hall, Inc. All rights reserved. Popular Financial Controls OBJECTIVERATIOCALCULATION Liquidity testCurrent ratio_Current assets_ Current liabilities Acid testCurrent assets level inventories Current liabilities Leverage testDebt-to-assets _Total debt_ Total assets Times-interest-earnedProfits before interest and taxes Total interest charges Operations testInventory turnoverCost of sales Inventory Total-assets-turnover Revenues Total assets ProfitabilityProfit margin-on-revenuesNet profit after taxes Total revenues Return-on-investmentNet profit after taxes Total assets Exhibit QM–5

7. Copyright © 2005 Prentice Hall, Inc. All rights reserved. Production Data for Virus Software Number of Hours Required per Unit WINDOWS MACMONTHLY PRODUCT DEPARTMENT VERSIONVERSION CAPACITY (HOURS) Design462,400 Manufacture2.02.0900 Profit per unit$18$24 Exhibit QM–6 4R + 6S < 2,400 2R + 2S < 900

8. Copyright © 2005 Prentice Hall, Inc. All rights reserved. Graphical Solution to Frye’s Linear Programming Problem Exhibit QM–7

9. Copyright © 2005 Prentice Hall, Inc. All rights reserved. Queuing Theory Queuing theory –A technique that balances the cost of having a waiting line against the cost of service to maintain that line where n = 3 customers, arrival rate = 2 per minute, and service rate = 4 minutes per customer.

10. Copyright © 2005 Prentice Hall, Inc. All rights reserved. Determining the Optimum Economic Order Quantity Exhibit QM–8

11. Copyright © 2005 Prentice Hall, Inc. All rights reserved. Economic Order Quantity Economic order quantity (EOQ) –A technique for balancing purchase, ordering, carrying, and stock-out costs to derive the optimum quantity for a purchase order. Example Forecast sales:4,000 units a year Unit cost:$50.00 each Ordering cost:$35.00 per order Carrying costs:20% of unit’s value.