4.

We-are-business minded Company has asked for your help in comparing its present computer
system with a new one its board of directors would like to see implemented. Proposed system
costs and present system costs are as follows:

(4a) Using Break-Even Analysis, determine the year in which We-are-business minded Company
will break even. Graph the costs and show the break-even point graphically. Explain the
significance of this breakeven point.
(4b) Determine the payback period using the manual/table method.
(4c) Graph the benefits versus the costs and show the payback period on the graph.
5. Premium Airlines has recently offered to settle claims for a class-action lawsuit, which was
originated for alleged price fixing of tickets. The proposed settlement is stated as follows:
Initially, Premium Airlines will make available to the settlement class a main fund of $25 million
in coupons. If the number of valid claims submitted is 1.25 million or fewer, the value of each
claim will be the result obtained by dividing $25 million by the total number of valid claims
submitted. For example, if there are 500,000 valid claims, each person submitting a valid claim
will receive a coupon with a value of $50. The denomination of each coupon distributed will be
in a whole dollar amount not to exceed $50. Thus, if there are fewer than 500,000 valid claims,
the value of each claim will be divided among two coupons or more. For example, if there are
250,000 valid claims, each person submitting a valid claim will receive two coupons, each
having a face value of $50, for a total coupon value of $100. If the number of valid claims
submitted is between 1.25 and 1.5 million, Premium Airlines will make available a supplemental
fund of coupons, with a potential value of $5 million. The supplemental fund will be made
available to the extent necessary to provide one $20 coupon for each valid claim. If there are
more than 1.5 million valid claims, the total amount of the main fund and the supplemental fund,
$30 million, will be divided evenly to produce one coupon for each valid claim. The value of
each such coupon will be $30 million divided by the total number of valid claims. Express the
above decision rules using ‘Structured English’.

6. Structured decision making is required with respect to the batch update of the COMPUTER
MASTERfile in an organization, which can be described as follows. There are three types of
updates: ADD,DELETE, and CHANGE. The COMPUTER MASTER record must be read. If the
transaction is an ADD and the master is not found, format and write the new COMPUTER
MASTER record. Print a valid transaction line on an UPDATE REPORT. For a CHANGE or
DELETE transaction, print a CHANGE ERROR LINE or a DELETE ERROR LINE if the
COMPUTER MASTER record is not found. If the COMPUTER MASTER record is found,
check the active code. If the record is inactive and the transaction is an ADD, format and rewrite
the new COMPUTER MASTER record. Print a valid transaction line on an UPDATE REPORT.
For a CHANGE or DELETE transaction, print a CHANGE ERROR LINE or a DELETE
ERROR LINE.
For a DELETE transaction, if the COMPUTER MASTER record is found and the code is
inactive, in addition to other rules, also select DELETE COMPUTER RECORD. If the
COMPUTER MASTER record is active and the transaction is an ADD, print an ADD ERROR
LINE. For a CHANGE transaction, format the changes and rewrite the COMPUTER MASTER
record. Print the VALID TRANSACTION LINE. For a
DELETE transaction, CHANGE COMPUTER RECORD and rewrite the COMPUTER
MASTER record. Print
the VALID TRANSACTION LINE.
(6a) Create a decision table for the above situation.
(6b) Create a decision tree for the above situation.

7. Azure Isle Resort has a pricing structure for vacationers in one of its three dwelling categories:
the hotel, villas, and beach bungalows. The base price is for staying in the hotel. Beach
bungalows have a 10 percent surcharge and renting a villa has a 15 percent surcharge. The final
price includes a discount of 4 percent for returning customers. Further conditions apply to how
close the resort is filled to capacity and whether the requested date is within one month from the
current date. If the resort is 50 percent full and the time is within one month, there is a 12 percent
discount. If the resort is 70 percent full and the time is within one month, there is a 6 percent
discount. If the resort is 85 percent full and it is within one month, there is a 4 percent discount.
(7a) Create a decision table for the Azure Isle Resort pricing structure {Hint: You may draw
multiple decision tables instead of one big/lengthy decision table. In order to do this, develop a
common discount decision table first, which will be accessed from another decision table, which
contains the percent surcharge based on dwelling type}.
(7b) ‘Simplify’ the decision table you created in the above question, using the rules discussed in
class.