EdwardsMachine Tools needs to purchase a new machine. The basic model is slower but costs less, while

Question:

EdwardsMachine Tools needs to purchase a new machine. The basic model is slower but costs less, while the advanced model is faster but costs more. Profitability will depend on future demand. The following table presents an estimate of profits over the next three years.
Demand Volume

Given the uncertainty associated with the demand volume, and no other information to work with, how would you make a decision? Explain your reasoning.

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This is a difficult decision because of the uncertainty in the volume The wrong decision can lead to significant lost profit opportunity For example i...View the full answer

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Question Posted: Sep 17, 2015 02:52 AM

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EdwardsMachine Tools needs to purchase a new machine. The basic model is slower but costs less, while

Question:

Medium High Decision Basic model Advanced model Low $80,000 S100,000 $150,000 $40,000 S110,000 $220,000

Step by Step Answer:

This is a difficult decision because of the uncertainty in the volume The wrong decision can lead to significant lost profit opportunity For example i...View the full answer

OM operations management

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