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A manufacturing company is faced with the problems of choosing four products to manufacture. The potential demand for each product may turn out to be good, satisfactory, or poor. Probabilities for each type are given below: Products Probabilities Good Satisfactory Poor A 0.60 0.20 0.20 B 0.75 0.15 0.10 C 0.60 0.25 0.15 D 0.50 0.20 0.30 The estimated profit/loss under different states of demand may be taken as under. Products Profit or Loss Good Satisfactory Poor A 40,000 10,000 1,100 40,000 20,000 |-7,000 50,000 15,000 -8,000 D 40,000 18,000 15,000 Prepare expected value table and advice the company about the choice of the product.

A manufacturing company is faced with the problems of choosing four products to manufacture. The potential demand for each product may turn out to be good, satisfactory, or poor. Probabilities for each type are given below: Products Probabilities Good Satisfactory Poor A 0.60 0.20 0.20 B 0.75 0.15 0.10 C 0.60 0.25 0.15 D 0.50 0.20 0.30 The estimated profit/loss under different states of demand may be taken as under. Products Profit or Loss Good Satisfactory Poor A 40,000 10,000 1,100 40,000 20,000 |-7,000 50,000 15,000 -8,000 D 40,000 18,000 15,000 Prepare expected value table and advice the company about the choice of the product.

College Algebra
College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter9: Counting And Probability
Section9.4: Expected Value
Problem 1E: If a game gives payoffs of $10 and $100 with probabilities 0.9 and 0.1, respectively, then the...
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A manufacturing company is faced with the problems of choosing four products to manufacture. The potential demand for each product may turn out to be good, satisfactory, or poor. Probabilities for each type are given below: Products Probabilities Good Satisfactory Рoor A 0.60 0.20 0.20 В 0.75 0.15 0.10 C 0.60 0.25 0.15 D 0.50 0.20 0.30 The estimated profit/loss under different states of demand may be taken as under. uct Profit or Loss Good Satisfactory Poor A 40,000 10,000 1,100 40,000 20,000 |-7,000 C 50,000 15,000 |-8,000 D 40,000 18,000 15,000 Prepare expected value table and advice the company about the choice of the product.
Transcribed Image Text:A manufacturing company is faced with the problems of choosing four products to manufacture. The potential demand for each product may turn out to be good, satisfactory, or poor. Probabilities for each type are given below: Products Probabilities Good Satisfactory Рoor A 0.60 0.20 0.20 В 0.75 0.15 0.10 C 0.60 0.25 0.15 D 0.50 0.20 0.30 The estimated profit/loss under different states of demand may be taken as under. uct Profit or Loss Good Satisfactory Poor A 40,000 10,000 1,100 40,000 20,000 |-7,000 C 50,000 15,000 |-8,000 D 40,000 18,000 15,000 Prepare expected value table and advice the company about the choice of the product.
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