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Mohammad estimates that the break-even point for EM5, a standard electrical motor, is 1200 motors. For any motor that is not sold there is an
Mohammad estimates that the break-even point for EM5, a standard electrical motor, is 1200 motors. For any motor that is not sold there is an opportunity loss of $1000. The average sales have been 2000 motors, however, 15% of the time sales have been less than 1000 and 15% of the time they have been greater than 3000 motors. Abdullah has just been approached by Radner Research, a firm that specializes in performing marketing studies for industrial products, to perform a standard marketing study. a) What is the standard deviation of demand? (round to the nearest full unit) b) What is the probability that the firm will incur a loss? c) What is the most Abdullah would be willing to pay for a market research study
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