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A company is considering a project of manufacturing a product with three different movement designs. The product will be sold at an average of USD
A company is considering a project of manufacturing a product with three different movement designs. The product will be sold at an average of USD 10. The first movement design using gears will provide the lowest tooling and set up cost of USD 100000 and USD 5 per unit of variable cost. A second design with spring action will have a fixed cost of USD 160000 and variable cost of USD 4 per unit. Yet another design with pulleys will have a fixed cost of USD 300000 and variable cost of USD 3 per unit. The demand events that can occur for the product and the probability of their occurrence is given below. Construct a payoff table for the above project. Which is the optimum design? How much can the decision-maker afford to pay in order to obtain perfect information about the demand? A company is considering a project of manufacturing a product with three different movement designs. The product will be sold at an average of USD 10. The first movement design using gears will provide the lowest tooling and set up cost of USD 100000 and USD 5 per unit of variable cost. A second design with spring action will have a fixed cost of USD 160000 and variable cost of USD 4 per unit. Yet another design with pulleys will have a fixed cost of USD 300000 and variable cost of USD 3 per unit. The demand events that can occur for the product and the probability of their occurrence is given below. Construct a payoff table for the above project. Which is the optimum design? How much can the decision-maker afford to pay in order to obtain perfect information about the demand
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