Homework Help is Here – Start Your Trial Now!
Business
Operations Management
Case 1: Joint Probabilities Mr. X is planning to open a new salon. Annual revenue will depend on how successful the marketing campaign is, and the potential outcomes are as follows: Marketing Campaign High success Moderate success Low success Revenue 1,000,000.00 10% 70% 700,000.00 20% 500,000.00 Costs are difficult to predict as the price of hair products and the labor market are volatile. The best estimates for the average costs are as follows: Materials: Percentage of revenue 5 40% 10 50% 15 10% Labor: Percentage of revenue 40 20% 50% 45 50 30% The fixed overhead of the salon is expected to be P10,000 per month.

Case 1: Joint Probabilities Mr. X is planning to open a new salon. Annual revenue will depend on how successful the marketing campaign is, and the potential outcomes are as follows: Marketing Campaign High success Moderate success Low success Revenue 1,000,000.00 10% 70% 700,000.00 20% 500,000.00 Costs are difficult to predict as the price of hair products and the labor market are volatile. The best estimates for the average costs are as follows: Materials: Percentage of revenue 5 40% 10 50% 15 10% Labor: Percentage of revenue 40 20% 50% 45 50 30% The fixed overhead of the salon is expected to be P10,000 per month.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section: Chapter Questions
Problem 31P
See similar textbooks
icon
Related questions
Question

: What is the expected annual profit of the salon? 

 

show solution using excel

Case 1: Joint Probabilities Mr. X is planning to open a new salon. Annual revenue will depend on how successful the marketing campaign is, and the potential outcomes are as follows: Marketing Campaign High success Moderate success Low success Revenue 10% 1,000,000.00 70% 700,000.00 20% 500,000.00 Costs are difficult to predict as the price of hair products and the labor market are volatile. The best estimates for the average costs are as follows: Materials: Percentage of revenue 5 40% 10 50% 15 10% Labor: Percentage of revenue 40 20% 45 50% 50 30% The fixed overhead of the salon is expected to be P10,000 per month.
Transcribed Image Text:Case 1: Joint Probabilities Mr. X is planning to open a new salon. Annual revenue will depend on how successful the marketing campaign is, and the potential outcomes are as follows: Marketing Campaign High success Moderate success Low success Revenue 10% 1,000,000.00 70% 700,000.00 20% 500,000.00 Costs are difficult to predict as the price of hair products and the labor market are volatile. The best estimates for the average costs are as follows: Materials: Percentage of revenue 5 40% 10 50% 15 10% Labor: Percentage of revenue 40 20% 45 50% 50 30% The fixed overhead of the salon is expected to be P10,000 per month.
Expert Solution
steps

Step by step

Solved in 4 steps with 7 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer