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MacDonald Products, Inc, of Clarkson, New York, has the option of ( a ) proceeding immediately with production of a new top - of -
MacDonald Products, Inc, of Clarkson, New York, has the option of
a proceeding immediately with production of a new topoftheline stereo TV that has just completed prototype testing or
b having the value analysis team complete a study.
If Tyrone Martin, VP for operations, proceeds with the existing prototype option a the firm can expect sales to be units at $ each, with a probability of and a probability of at $ If however, he uses the value analysis team option b the firm expects sales of units at $ with a probability of and a probability of units at $ Value engineering, at a cost of $ is only used in option b Which option has the highest expected monetary value EMV
The EMV for option a is $ and the EMV for option b is $ Therefore, option has the highest expected monetary value. Enter your responses as integers
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