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Question 5 : A foundry has received an order of 2 0 custom - designed castings. The casting process costs $ 7 0 0 per
Question : A foundry has received an order of customdesigned castings. The casting process costs $ per unit scheduled. If a casting is good then it is machined to specifications at an added cost of $ per unit If a casting is not sold, it has a recycle value of $ The customer has indicated a willingness to pay $ per casting for acceptable castings. The customer also agreed to pay $ each for one or two additional castings. However the customer is not willing to purchase fewer than castings and not willing to pay more than castings. Based on the historical data the following probability distribution have been estimated.
tabletable GroodCastingsNumber of Castings Scheduled
If casting is scheduled for production what would be expected profit?
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