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I referred to maximax the while scenario but went overkill on the probability percentages and chose format A with the 1400 demand as the preferred choice based on my calculations and came to a conclusion of 3.7…. does this ring bells with you or did I totally go off on a tangent?
For q1 risk and uncertainty ques,i got format A as well. I considered maximax approach only. For part b, i elaborated the building blocks model for bavus…has anyone done same for part b?
i kinda lost it by looking at Q4- Gscore , i only came across the Z score & A score in the book
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Hmmm. It’s actually akin to z score. its just to calculate with info provided
@hpanchoo2206 said:
For q1 risk and uncertainty ques,i got format A as well. I considered maximax approach only. For part b, i elaborated the building blocks model for bavus…has anyone done same for part b?Yes Harsha. I elaborated on the Standards(Target) section of the Building Block Model.
For Maxi max, Maxi min, and regret, you do not need to do the probabilities. Only on neutral you do expected values ? The figures were all the same on the performance report in Q1 as it was a template that the franchisees use. Was quite nice that it missed out all the non financials so it gave us an opportunity to comment on loads of them hinted at in scenario( Quality, clean etc).
probability question made me chasing my tail for the rest of the exam as it took ages I found. Managed to finish everything to the standard I would have wanted just hope it’s enough ! Only thing I had to miss was the exchange rate on Q2 so probably lost 2-3 marks but hey ho ! The fuel had something like 70% related to distribution. So extracted the 30% to add in after, then did the increase in fuel to 59 and 63% in the relevant quarters then added the 30% in at the end again.
For the G score I thought it was a lot of marks for what it was. I did a calculation just doing one of them (G2 or G3 I think it was) as PBIT instead of EBITDA and it actually reduced the score to at risk of failure and then started slating into EBITDA for masking performance (maybe not relevant). Using EBITDA I think I got 4.17 or something like that overall.
For anyone else who this is their last exam good luck ! Hard to forget about it when these forums are around lol. Even if people have different answers follow through will be key along with ensuring we commented on whatever answers we got sufficiently. GOOD LUCK !
@irondan11 said:
For Maxi max, Maxi min, and regret, you do not need to do the probabilities. Only on neutral you do expected values ? The figures were all the same on the performance report in Q1 as it was a template that the franchisees use. Was quite nice that it missed out all the non financials so it gave us an opportunity to comment on loads of them hinted at in scenario( Quality, clean etc).probability question made me chasing my tail for the rest of the exam as it took ages I found. Managed to finish everything to the standard I would have wanted just hope it’s enough ! Only thing I had to miss was the exchange rate on Q2 so probably lost 2-3 marks but hey ho ! The fuel had something like 70% related to distribution. So extracted the 30% to add in after, then did the increase in fuel to 59 and 63% in the relevant quarters then added the 30% in at the end again.
For the G score I thought it was a lot of marks for what it was. I did a calculation just doing one of them (G2 or G3 I think it was) as PBIT instead of EBITDA and it actually reduced the score to at risk of failure and then started slating into EBITDA for masking performance (maybe not relevant). Using EBITDA I think I got 4.17 or something like that overall.
For anyone else who this is their last exam good luck ! Hard to forget about it when these forums are around lol. Even if people have different answers follow through will be key along with ensuring we commented on whatever answers we got sufficiently. GOOD LUCK !
These forums are actually a nightmare for convincing yourself that you’ve messed everything up. I guess the Maximax calculation (that I wasn’t aware of) appears to be the right approach to answer Q1 … just looked at a past question in the BPP revision kit and there’s a similar style to be fair with the above approach! :-/
I’m not sure how this will translate into the marking scheme, whether the students that applied Expected Values will be completely penalised – I’ll need some healthy marks on my calculations to have a chance at passing this paper.
Anyway, hopefully the vast majoirty of us pass! Final one and I feel so drained. Really don’t want to do another exam ever again.
I hope for the better, I did q1,2,3 and I thought the opinions from others match with what I did.
q3 gave some hard time@yinka228. Yes, I also got grey area needing further investigation and part b liquidity I tested current ratio and found it was over 1 which is OK indicating ability to settle obligations as they fall due, so the G score alone is not to be used in isolation.
if you calculate maximax, maximin and min regret are already calculated? really only one table. then calculate the EV using the probabilities given. I said the scenario stated they were risk seeking so said they would choose c. but i definded all risk appetites and said what they would choose.
(shoot the dog, milk the cow) – like this quote! ha ha
found the budget recalculation finicky and time consuming but easy marks if it’s correct.
I calculated the G score to be just over 4 so at risk of failing and talked about the model which is a tiny bit different to the z score i.e. the g score was country specific
an OK paper overall – fair, but very easy to mess up if you ran out of time. fingers crossed I passed!
Sorry, just saw this. It was Q2 one of the adjustments
@yinka228 said:
Guys see if the first adjustment in the budgeting question where it stated that Sales volumes are expected to be 2% higher each quarter than forecast in the current budget. How did you tackle this?
Thought the questions were fair but totally messed up my time management meaning I ran out of time on my question 2 and my workings were really messy! Argh! Expecting a resit…
I also received in Q1 that maximax would be with Format A demand 1400. Maximin received to be at Format B.
Here’s my maximax calculation. I think I remember the numbers correctly:
Here was data given in question:
Sales/unit c/s ratio Days in year Fixed Costs
Project A 3.8 58% 360 900000
Project B 4 59% 360 980000
Project C 4.2 63% 360 1120000Then the one way data table is as follows:
For example for project A at 1200 demand, profit = 1200*3.8*58%*360-900000 = 52128
Project A Project B Project C
1200 52128 39520 23072
1400 210816 209440 213584
1600 369504 379360 404096So under maximax project C is the choice giving a maximum possible profit after fixed costs of £404096 if the demand is 1600.
Yes, but you also have probability for each option and if you consider it then the results change.
@anastell said:
Yes, but you also have probability for each option and if you consider it then the results change.A maximax calculation does not use probabilities as it is a technique for dealing with uncertainty.
The probabilities are for expected value analysis which is a technique for dealing with risk
@chris165 said:
A maximax calculation does not use probabilities as it is a technique for dealing with uncertainty.The probabilities are for expected value analysis which is a technique for dealing with risk
Hmm – seems harsh that probabilities were given to throw us. Information is almost always given to aid us?
Also, the question stated that the organisation were risk seeking, so an expected value analysis will surely be accepted (as would a MaxiMax).
@ryansm05 said:
Hmm – seems harsh that probabilities were given to throw us. Information is almost always given to aid us?Also, the question stated that the organisation were risk seeking, so an expected value analysis will surely be accepted (as would a MaxiMax).
In my opinion the question required both EV and maximax. It was for 17 marks…
the probabilities are used only in the EV calculations
Those that used minimax and maximax rules would be correct under uncertainty. Also just calculating the profit ignoring the probabilities would also be right as it measures uncertainty about the outcome of the options. Risk relates to using probabilities and finding the expected value of the outcome. The choice of what options to take is not straight one and it will depend on the risk profile o the person taking the decision. Since the management are optimistic, maximax rule will be appropriate. Pessimistic person will use minimax rule. Also note that the calculation of Maximax or minimax will involve using the contribution ratio ignoring the probabilities of the outcome of the levels used. Hope this helps
Mmmmm after going through all the comments on the risk question, I have realised that I did a profit table with wrong figures because I used probabilities where I was not supposed to.
But can someone tell me if it is possible that I can be given some marks for demonstrating my knowledge of Maximax maximin and minimax regrets, even if figures used were wrong.Chris165
You are very correct, you made me realise where I went wrong.
What I want to know now is if I can be given some marks for demonstrating my knowledge of maximax maximin and minimax regret, even if my figures were wrong.
I regret all the time wasted on all the calculations when I finally left my last question unfinished.
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