BSc (Hons) Digital and Technology Solutions | Assignment

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BSc (Hons) Digital and TechnologySolutionsMaths for ComputingCoursework Assessment BriefWinter Term 2016
Maths for Computing2016 Coursework Assessment Brief1. Problem DescriptionBPP Lyft is a UK rival of Uber, the American multinational online transportation network companyoffering driver services to customers through its mobile app. They have been operating within the UKsuccessfully for many years, and despite the uncertainty surrounding Britain’s exit from Europe, theyare taking a long term view and are now considering further expansion of their fleet of autonomous‘self-driven’ vehicles by launching its services in Leicester. The managing director, Robert Jules (RJ),financial director, Eva Watkins (EW) and marketing director, Jonathan Kent (JK) have met recently todiscuss the decision. Below is an extract from that meeting which took place at the company’s mainheadquarters in London.RJ:We've finally been able to identify a suitable site for the new fleet in Leicester. The site has plentyofroom andwe shall need to decide how large an operations hub to build.If we use one of our standarddesigns thenwe shall have to decide between a small, medium or large operations hub.Fixed & Variable CostsEW:The fixed costs clearly increase with size.We shall need to take into account the fixed costs pluscosts which are proportional to the actual sales revenue achieved. I've summarised the annual costsin this table:Fixed costsVariable costs(in £000's)(as a proportion of actual sales revenue)Small500.42Medium750.38Large1000.34Sales CapacityJK:But a larger hub gives us greater capacity. I think that if we just go for the smallest option we shallfind that we have not got the capacity for all the potential demand in Leicester and so miss out onpotential profit. Additionally, we are likely to be overrun by our main competitor Uber, who alreadyhave a strong presence in the city. The maximum annual sales that are possible from small, mediumand large scale operations are £200,000, £275,000 and £350,000 respectively.Revenue PotentialRJ:Well do we have any idea of the driver revenue that will be generated by the new location?JK:We've done some analysis based on our experience elsewhere and the likely competition, butthere's still a lot of uncertainty. The results can be summarised as a probability distribution of themarket share we get of the total driver revenue in the Leicester area.Market share0.050.060.070.080.090.10Probability0.10.10.30.20.20.1
DC:That's not much help without knowing the total driver revenue for the sector in the Leicester area.EW:I may be able to help here. Although we don't have the figure for Leicester, I have got theinformation for 49 other areas in the U.K. together with their populations. We know the populationof the Leicester area, so we should be able toestimate the total sales revenue for the sector in theLeicester area using that information.I don't expect much change over future years and I don'texpect the new hub to create any additional total demand in the area.[This information is stored in the Excel file. Thefirst column is the population of the area in thousands(000s) and the secondcolumn is the annual driver revenue in the area in thousands of pounds(£000s).The population of Leicester is connected to your student card number by thefollowing formula, where N is the last 3 digits of your student card number:Population (in thousands) = 110 + N/20Please use670 as N, as 670 is the last 3 digits of my student ID card.(For example, if the last three digits are 437, the population is 131850)Report RequiredRJ:Why don’t we get the student who is on placement with us to analyse the situation. What Isuggestis that we ask the student towrite a brief report for us advising us on what size operationshub to build.I would like the report toinclude three separate tables showing the sales revenue, thecosts and the profit for each size of hub and each market share.EW:I would like the report toinclude the results of any statistical analysis carried out.In the past wehaveused expected values to make the decision on hub size. I suggest wealsouseexpected valuesfor this decision.2. Student BriefYou are the student concerned. You are required toproduce a report for the company.The reportshouldcontain all the information requested by RJ and EW, arecommendation of the decision thatthe company should take, and any relevant comments about the situation.Your report shouldexplain the analysis that you carried out. You can assume thatEW is familiarwiththe statistical concepts covered on the module.State any assumptions that you make.Your report should be submitted as a single word document and should be done as an individual piece ofwork.The report should be no more than 2000 words and will be worth 100% of the module grade. Singleline spacing is fine. Since this is a short report you donotneed to start different sections on separatepages and you donotneed to include a table of contents. No appendices should be includedput any information required in the main body of the report.3. Report Structure and GuidanceYour report should contain the following, compulsory sections:IntroductionState briefly what is contained in the report, that is, the work you have done, and your finalrecommendation (100 words).
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