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MIS775 Decision Modelling For Business Analytics

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MIS775 Decision Modelling For Business Analytics

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Course Code: MIS775
University: Deakin University

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Country: Australia

Question:
 Conceptual model is inappropriate is or not clearly outlined A vague conceptual model is represented which does not reflect clearly on the conceptual model, which contains several modelling errors. An appropriate conceptual model is presented and the decision inputs are identified. Relationships are mostly correctly defined. A clear presentation of conceptual model is presented and the decision inputs are identified. Relationships are mostly correctly defined. A very clear presentation of conceptual model provided. All decision inputs are modelled correctly in a clear way. A very clear presentation of conceptual model provided. All decision inputs are modelled correctly in a clear and innovative fashion Spreadsheet?based decision model Decision model is inappropriate is or not clearly outlined Few decision inputs are identified and briefly described. There are clear errors and omissions. Main decision inputs are  produced to identify their relationships. There are a few errors and omissions. Main decision inputs are produced to identify their relationships. All decision inputs are modelled correctly in a clear way. A very clear presentation of decision model provided. All decision inputs are modelled correctly in a clear and innovative fashion which provides end users with an interactive interface which is easy to use. Scenario and sensitivity analysis reports are not included or is inappropriate Some of the possible scenarios and sensitivity analyses are considered and are presented, but not clearly. 
Most of the important scenarios and important inputs are considered for the analysis. Most of the important scenarios and inputs are considered for the analysis and elaboration on them is presented clearly. 6 points All of the main scenarios and inputs are considered and they are justified in a clear way, and are presented in a compelling fashion. All scenarios and inputs are considered and they are fully justified in a clear way, and are presented in a compelling fashion. Stochastic model including choice of distributions Stochastic modelling is not included or is inappropriate Stochastic modelling is poorly implemented and analysed. Some effective stochastically modelling is used with poor choice of distributions. Some effective stochastically modelling is used with some elaboration on them. Stochastically modelling is used effectively; choice of distributions is justified.  Stochastically modelling is used effectively; choice of distributions is fully justified.Simulated outputand risk analysis is not included or is inappropriate Unclear simulation outputs are presented. Unclear analysis of effect of input risks. Some analysis of simulation output are presented. It considers some relevant stochastic decision inputs and discusses to some effect the effect on output Reasonable analysis of simulation outputs is presented. It considers some of the main stochastic decision inputs and discusses risk on output Clear and Reasonable analysis of simulation output is provided with a comprehensive consideration of the main stochastic decision inputs, some discussion of the effect on output Clear and comprehensive analysis of simulation output is provided with comprehensive consideration of the main stochastic decision inputs, discussion of the effect on output. 
Answer:

Number of Borrowers
2
 
 
 
 

 
 
 
 
 
 

Take Home MonthlySalary
 $      3,500.00
 
 
 
 

 
 
 
 
 
 

Fixed Inputs
 
 
 
 

Phone
 $         130.00
 
 
 
 

Electricity
 $         163.00
 
 
 
 

Gas
 $           52.00
 
 
 
 

Water and sewer
 $           93.00
 
 
 
 

Cable
 $         163.00
 
 
 
 

Waste removal
 $         151.00
 
 
 
 

Maintenance or repairs
 $         102.00
 
 
 
 

Insurance
 $         160.00
 
 
 
 

Medical
 $           66.00
 
 
 
 

Clothing
 $         191.00
 
 
 
 

Others
 $           65.00
 
 
 
 

Council Rates
 $         163.00
 
 
 
 

Cable TV
 $         198.00
 
 
 
 

Internet
 $         121.00
 
 
 
 

 
 
 
 
 
 

Decision  Variables
 
 
 
 
 

Total Monthly Cost
 $      1,818.00
 
 
 
 

Max Monthly Payment Based on Income
 $      5,485.00
 
 
 
 

Loan amount required
 $ 2,50,000.00
 
 
 
 

 
 
 
 
 
 

 
 
 
 
 
 

Financing (Stochastic)
 
 
 
 
 

Term of Mortgage (years)
                   20
 
 
 
 

Annual Interest Rate
4.00%
 
 
 
 

 
 
 
 
 
 

Calculated Variables
 
 
 
 
 

Total Interest Paid
 $    21,616.13
 
 
 
 

Actual tenure of Payment (Years)
4.13
 
 
 
 

Future Value of the Loan
 $ 2,71,616.13
 
 
 
 

Loan Amount Based on Max Monthly Payment
 $ 9,05,144.89
 
 
 
 

 
 
 
 
 
 

Scenario Summary
 
 
 
 
 

 
 
Current Values:
Scenario 1
Scenario 2
Scenario 3

 
 
 
Created by Windows User on 13-05-2018
Created by Windows User on 13-05-2018
Created by Windows User on 13-05-2018

Changing Cells:
 
 
 
 
 

 
$B$3
7506
7506
7506
7506

 
$B$23
 $     6,191.00
 $3,500.00
 $6,191.00
 $6,191.00

 
$B$22
 $     1,647.00
 $1,647.00
 $2,000.00
 $1,647.00

 
$B$29
0.04
0.04
0.04
0.05

Result Cells:
 
 
 
 
 

 
$B$33
20.00
20.00
20.00
20.00

Notes:  Current Values column represents values of changing cells at
 
 
 
 

time Scenario Summary Report was created.  Changing cells for each
 
 
 
 

scenario are highlighted in gray.
 
 
 
 
 

 
 
 
 
 
 

 
 
 
 
 
 

 
 
Final
Reduced
 
 

Cell
Name
Value
Gradient
 
 

$B$23
Max Monthly Payment Based on Income
 $     1,971.00
 $          –  
 
 

 
 
 
 
 
 

 
 
 
 
 
 

 
 
Final
Lagrange
 
 

Cell
Name
Value
Multiplier
 
 

$B$33
Actual tenure of Payment (Years)
20.00
0.00
 
 

 
 
 
 
 
 

Number of Borrowers
1
 
 
 
 

 
 
 
 
 
 

Take Home MonthlySalary
 $      3,500.00
 
 
 
 

 
 
 
 
 
 

Fixed Inputs
 
 
 
 

Phone
 $           68.00
 
 
 
 

Electricity
 $         177.00
 
 
 
 

Gas
 $           81.00
 
 
 
 

Water and sewer
 $         187.00
 
 
 
 

Cable
 $         163.00
 
 
 
 

Waste removal
 $         142.00
 
 
 
 

Maintenance or repairs
 $         166.00
 
 
 
 

Insurance
 $         177.00
 
 
 
 

Medical
 $         138.00
 
 
 
 

Clothing
 $           62.00
 
 
 
 

Others
 $         105.00
 
 
 
 

Council Rates
 $           66.00
 
 
 
 

Cable TV
 $           56.00
 
 
 
 

Internet
 $         165.00
 
 
 
 

 
 
 
 
 
 

Decision  Variables
 
 
 
 
 

Total Monthly Cost
 $      1,753.00
 
 
 
 

Max Monthly Payment Based on Income
 $      1,971.00
 
 
 
 

 
 
 
 
 
 

 
 
 
 
 
 

 
 
 
 
 
 

Financing (Stochastic)
 
 
 
 
 

Term of Mortgage (years)
                   20
 
 
 
 

Annual Interest Rate
4.00%
 
 
 
 

 
 
 
 
 
 

Calculated Variables
 
 
 
 
 

Total Interest Paid
 $ 1,47,781.92
 
 
 
 

Actual tenure of Payment (Years)
20.00
 
 
 
 

Future Value of the Loan
 $ 4,73,040.00
 
 
 
 

Loan Amount Based on Max Monthly Payment
 $ 3,25,258.08
 
 
 
 

 
 
 
 
 
 

Options
Annual Interest Rate
Take Home MonthlySalary
Total Monthly Cost
Max Monthly Payment Based on Income
 

1
10%
3932
2018
1914
 

2
5%
6548
1992
4556
 

3
7%
4612
1868
2744
 

4
9%
7017
2041
4976
 

5
9%
4877
2051
2826
 

6
10%
6722
2013
4709
 

7
8%
7536
2176
5360
 

8
4%
7094
1895
5199
 

9
8%
6060
2144
3916
 

10
6%
6680
1809
4871
 

11
5%
7249
2060
5189
 

12
6%
5825
2037
3788
 

13
9%
7591
1969
5622
 

14
8%
6679
1967
4712
 

15
8%
5726
2075
3651
 

16
8%
7185
1818
5367
 

17
8%
7479
2076
5403
 

18
8%
5718
1813
3905
 

19
5%
5972
2063
3909
 

20
7%
7699
1974
5725
 

21
4%
4953
1929
3024
 

22
6%
6106
1978
4128
 

23
7%
4552
2000
2552
 

24
6%
5472
1913
3559
 

25
10%
4083
2166
1917
 

26
9%
5501
1972
3529
 

27
9%
4692
2030
2662
 

28
10%
7672
1824
5848
 

29
4%
4619
2007
2612
 

30
6%
5143
1907
3236
 

31
5%
5869
1852
4017
 

32
5%
7047
1887
5160
 

33
6%
7274
2035
5239
 

34
9%
7675
2070
5605
 

35
6%
3717
2139
1578
 

36
8%
4759
2145
2614
 

37
7%
7143
1951
5192
 

38
8%
6483
1942
4541
 

39
9%
6866
2130
4736
 

40
5%
5724
1901
3823
 

41
4%
5068
2094
2974
 

42
5%
4987
1865
3122
 

43
6%
3679
2020
1659
 

44
7%
6932
2139
4793
 

45
7%
4592
2091
2501
 

46
8%
4892
2053
2839
 

47
10%
6362
1806
4556
 

48
10%
7784
2076
5708
 

49
10%
3755
2198
1557
 

50
5%
7179
2035
5144
 

 
 
 
 
 
 

Column1
 
 
 
 

 
 
 
 
 
 

Mean
7.36%
 
 
 
 

Standard Error
0.25%
 
 
 
 

Median
8.00%
 
 
 
 

Mode
8.00%
 
 
 
 

Standard Deviation
1.77%
 
 
 
 

Sample Variance
0.03%
 
 
 
 

Kurtosis
-0.66
 
 
 
 

Skewness
-0.53
 
 
 
 

Range
6.0%
 
 
 
 

Minimum
4.0%
 
 
 
 

Maximum
10.0%
 
 
 
 

Sum
3.68
 
 
 
 

Count
50
 
 
 
 

 
 
 
 
 
 

Observed Freq
NORMAL.PROB.CUM
NORMAL.PROB
Expected Freq
 

0
0.000163366
0.000163366
0.01
 
 

0
0.000465399
0.000302033
0.02
 
 

0
0.001230195
0.000764796
0.04
 
 

0
0.003019171
0.001788975
0.09
 
 

0
0.006884896
0.003865725
0.19
 
 

0
0.014601517
0.007716621
0.39
 
 

5
0.028831168
0.014229651
0.71
 
 

0
0.053071199
0.024240032
1.21
 
 

0
0.091216846
0.038145647
1.91
 
 

5
0.146670538
0.055453691
2.77
 
 

0
0.22114207
0.074471532
3.72
 
 

3
0.313532079
0.092390009
4.62
 
 

0
0.419417219
0.10588514
5.29
 
 

10
0.531521076
0.112103857
5.61
 
 

12
0.641164285
0.109643209
5.48
 
 

0
0.740228891
0.099064606
4.95
 
 

11
0.822914649
0.082685758
4.13
 
 

0
0.886670198
0.063755549
3.19
 
 

4
0.932083165
0.045412967
2.27
 
 

0
0.961965584
0.029882419
1.49
 
 

0
0.980130143
0.018164559
0.91
 
 

0
 
 
 
 
 

50
 
 
 
 
 

 
 
 
 
 
 

Take Home MonthlySalary
Total Monthly Cost
Max Monthly Payment Based on Income
Actual tenure of Payment (Years)
 
 

3500.0
1753.0
1971.0
9.28
 
 

3500.0
1874.0
1971.0
9.28
 
 

3500.0
1567.0
1971.0
9.28
 
 

3500.0
1854.0
1971.0
9.28
 
 

3500.0
1973.0
1971.0
9.28
 
 

3500.0
1619.0
1971.0
9.28
 
 

3500.0
1618.0
1971.0
9.28
 
 

3500.0
1582.0
1971.0
9.28
 
 

3500.0
1720.0
1971.0
9.28
 
 

3500.0
1804.0
1971.0
9.28
 
 

3500.0
1640.0
1971.0
9.28
 
 

3500.0
1893.0
1971.0
9.28
 
 

3500.0
1935.0
1971.0
9.28
 
 

3500.0
1691.0
1971.0
9.28
 
 

3500.0
1607.0
1971.0
9.28
 
 

3500.0
1729.0
1971.0
9.28
 
 

3500.0
1537.0
1971.0
9.28
 
 

3500.0
1826.0
1971.0
9.28
 
 

3500.0
1788.0
1971.0
9.28
 
 

3500.0
2140.0
1971.0
9.28
 
 

3500.0
1623.0
1971.0
9.28
 
 

3500.0
1563.0
1971.0
9.28
 
 

3500.0
1761.0
1971.0
9.28
 
 

3500.0
1755.0
1971.0
9.28
 
 

3500.0
1397.0
1971.0
9.28
 
 

3500.0
1687.0
1971.0
9.28
 
 

3500.0
1985.0
1971.0
9.28
 
 

3500.0
1824.0
1971.0
9.28
 
 

3500.0
1824.0
1971.0
9.28
 
 

3500.0
1814.0
1971.0
9.28
 
 

3500.0
1860.0
1971.0
9.28
 
 

3500.0
1471.0
1971.0
9.28
 
 

3500.0
1538.0
1971.0
9.28
 
 

3500.0
1891.0
1971.0
9.28
 
 

3500.0
1629.0
1971.0
9.28
 
 

3500.0
2053.0
1971.0
9.28
 
 

3500.0
1583.0
1971.0
9.28
 
 

3500.0
1925.0
1971.0
9.28
 
 

3500.0
1654.0
1971.0
9.28
 
 

3500.0
1832.0
1971.0
9.28
 
 

3500.0
1602.0
1971.0
9.28
 
 

3500.0
1956.0
1971.0
9.28
 
 

3500.0
1747.0
1971.0
9.28
 
 

3500.0
1790.0
1971.0
9.28
 
 

3500.0
1732.0
1971.0
9.28
 
 

3500.0
1593.0
1971.0
9.28
 
 

3500.0
1493.0
1971.0
9.28
 
 

3500.0
1822.0
1971.0
9.28
 
 

3500.0
1788.0
1971.0
9.28
 
 

3500.0
1887.0
1971.0
9.28
 
 

 
 
 
 
 
 

Actual tenure of Payment (Years)
 
 
 
BIN
FREQUENCY

 
 
 
 
4.0%
0

Mean
9.291
 
 
4.5%
0

Standard Error
0.369
 
 
5.0%
0

Median
8.089
 
 
5.5%
0

Standard Deviation
2.606
 
 
6.0%
2

Sample Variance
6.790
 
 
6.5%
4

Kurtosis
-1.176
 
 
7.0%
5

Skewness
0.585
 
 
7.5%
2

Range
8.478
 
 
8.00%
10

Minimum
5.810
 
 
8.50%
6

Maximum
14.289
 
 
9.00%
1

Sum
464.535
 
 
9.50%
2

Count
50
 
 
10.00%
0

 
 
 
 
10.50%
1

 
 
 
 
11.00%
1

 
 
 
 
11.50%
3

 
 
 
 
12.00%
2

 
 
 
 
12.50%
1

 
 
 
 
13.00%
2

 
 
 
 
13.50%
6

 
 
 
 
14.00%
0

 
 
 
 
14.50%
2

 
 
 
 
15.00%
0

 
 
 
 
 
0

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