Management

Der MANAGEMENT COURSE 3233 NAME EXPECTED VALUE AND UNCERTANTY Problem 1: Expected Value Determine whether you would decide, based on profitability, to go with the product cluster of Product A, Product B, and Product C or the product cluster of Product X, Product Y, and Product Z. Product cluster ABC has a fixed cost of 8.7% of revenue. Product cluster XYZ has a fixed cost of 9.3% ofrevenue. Product A is expecting revenues of S900,000 and variable costs of $300,000. Product B is expecting revenues of $700,000 and variable costs of S200,000. Product C is expecting revenues of $800,000 and variable costs of $400,000. The probability of achieving these revenues and costs are 5% for Product A and 25% for Product C? Product X is expecting revenues of $700,000 and variable costs of $300,000. Product Y is expecting revenues of $800,000 and variable costs of $250,000. Product Z is expecting revenues of S600,000 and variable costs of $300,000. The probability of achieving these revenues and costs are 35% for Product X and 15% for Product 5