2. A city is holding an annual marathon event and wants to produce t-shits. Alfonso was able toobtain previous years' demand and probability data as given in below table. The selling price is$10, cost is $5, and the salvage value is $1. Calculate all payoff numbers in the table and profit.Show work. How many shirts should they prepare?Prepare1000Prepare2000Prepare3000Demand=1000| Demand=2000 Demand=300030%35%35%ProfitI

sales volume =min(volume prepared, demand)egrow1, column 2sales volume = min(1000,2000)=1000 demand…

Answered: 2. A city is holding an annual marathon…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

See similar textbooks

Similar questions

2. A toy manufacturer has three different mechanisms that can be installed in a doll that it sells. The different mechanisms have three different setup costs (overheads) and variable costs and, therefore, the profit from the dolls is dependent on the volume of sales. The anticipated payoffs are as follows. Light Demand 0.25 $325,000 $300,000 -$400,000 Heavy Demand 0.3 Probability Wind-up action Pneumatic action Electrical action Moderate Demand 0.45 $190,000 $420,000 S170,000 $400,000 $800,000 $240,000 a. What is the EMV of each decision alternative? b. Which action should be selected? c. What is the expected value with perfect information? d. What is the expected value of perfect information? e. What is the expected opportunity loss?
1. Decision Rules. A company is choosing a motorized mechanism for a new toy, a dancing ballerina (TippiToes) that is currently under development. Demand is uncertain. but the company is confident that demand will be: Light (25,000 units), Moderate (100,000 units) or Heavy (150,000) units. The payoff table for each mechanism (in $) is given below. Action: Choice of Mechanism Event Gears and Levers Spring Weights and Pulleys Pneumatic Light 25,000 -10,000 -125,000 -300,000 Moderate 400,000 440,000 400,000 300,000 Heavy 650,000 740,000 750,000 700,000 Questions: (1) Apply Maximax, Maximin, Minimax Regret, and EMV rules (assuming that the probability of Light demand is 0.1, Moderate demand is 0.7, and Heavy demand is 0.2) to decide what mechanism should the company choose? (2) What is the expected value of perfect information? (3) Draw a decision tree to solve this problem.
A company that makes food-friendly silicone (for use in cooking and baking pan coatings)is considering four independent projects shown, all of which can be considered to be viable for only 10 years. The company's MARR is 15% per year. Project A B C D First Cost, $ -1500 -2300 -5600 -7600 Annual net Income, $/year 200 460 1150 1200 Salvage value, $ 5 6 8 7 Determine which products to implement Financial values are in $1000 units. The present worth of project A is $___________, So project A is ___________(Rejected / Accepted) The present worth of project B is $___________, So project B is ___________(Rejected / Accepted) The present worth of project C is $___________, So project C is ___________(Rejected / Accepted) The present worth of project D is $___________, So project D is ___________(Rejected / Accepted)
Ritz Products’s materials manager, Tej Dhakar,must determine whether to make or buy a new semiconduc-tor for the wrist TV that the firm is about to produce. Onemillion units are expected to be produced over the life cycle.If the product is made, start-up and production costs of themake decision total $1 million, with a probability of .4 thatthe product will be satisfactory and a .6 probability that itwill not. If the product is not satisfactory, the firm will haveto reevaluate the decision. If the decision is reevaluated, thechoice will be whether to spend another $1 million to redesignthe semiconductor or to purchase. Likelihood of success thesecond time that the make decision is made is .9. If the secondmake decision also fails, the firm must purchase. Regardlessof when the purchase takes place, Dhakar’s best judgment ofcost is that Ritz will pay $.50 for each purchased semiconduc-tor plus $1 million in vendor development cost.a) Assuming that Ritz must have the semiconductor…
Sheet 9: Q8 Planning model Q8. Use below table to to find the profit of the company, (production plan is 3000) Y slope 2500 2000 5500 65000 7500 95000 Unit price 15.5 Units 3000 Fixed cost 19000 Y(pkp) X(pkp) alope Var cot sotal cost Sale
Suppose we are considering the question of how much capacity to build in the face of uncertain demand. Assume that the cost is $20 per unit of lost sales due to insufficient capacity. Also assume that there is a cost of $7 for each unit of capacity built. The probability of various demand levels is as follows: Demand—X Units Probability of X 0 .05 1 .10 2 .15 3 .20 4 .20 5 .15 6 .10 7 .05 a. How many units of capacity should be built to minimize the total cost of providing capacity plus lost sales? b. State a…
A hotel is runned by a manager and the owners propsoed a new proposal to increase their sales and if the manager does increases the sales they will pay him addiotional 10k but if they stick to their current situation what are the pros and cons, List 4 pros and 4 cons for status quo.
31) Maimouna Company is providing the following information to you in an intention to calculate the total cost of the company. The cost of the machinery is OMR 50,000 where estimated life is 5 years, Material Used OMR 40,000, Labour OMR 20,000 and Variable Overheads OMR 30,000. Determine the total cost. a. OMR 80,000 b. OMR 180,000 c. None of the options d. OMR 100,000
Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Order size 1 lot 2 lots 3 lots (a) Show a regret table. Order size 1 lot 2 lots 3 lots 13 9 6 Low 13 9 6 Low Demand Medium 16 24 32 16 24 32 High 16 32 61 Demand Medium (b) What decision should be made by the optimist? O 1 lot O2 lots 3 lots 16 32 61 High Maximum Regret 2:06 PM
You work for the Brad's Nailer Company which manufactures three types of nailers: a pneumatic model, the "ProLine", and a cordless model. You have contracted to supply a national retail chain with all three models of nailers. However, Brad's nailer production capability is limited in three departments: production, testing, and packaging. The goal is to maximize your revenue. Your answer will be the number packaging hours to be produced (The number of nailers must be a whole number.) Use Scenario 2
Consider the planned construction of new office building in a downtown area of a large city when office space in in surplus demand (i.e. more office space than users). 1.Construct a risk analysis that examines the various forms of risks (technical, commercial, financial etc) related to the creation of this office building. 2. Explain how the analysis would change if the office were in high demand.
Sorin Incorporated, a company that produces and sells a single product, has provided its contribution format income statement for January. Sales (3,400 units) Variable expenses Contribution margin $ 112,200 50,490 61,710 Fixed expenses 45,700 Net operating income $ 16,010 If the company sells 3,900 units, its total contribution margin should be closest to: (Do not round intermediate calculations.) Multiple Choice $61,710 $70,785 $92,700 $18,364

SEE MORE QUESTIONS

Recommended textbooks for you

Marketing

ISBN:

9780357033791

Author:

Pride, William M

Publisher:

South Western Educational Publishing

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Marketing

ISBN:

9780357033791

Author:

Pride, William M

Publisher:

South Western Educational Publishing

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

SEE MORE TEXTBOOKS