27. Jackston, Inc. manufactures and distributes a line of Christmas toys. The company had neglected to keep its doll house line current. As a result, sales decreased to approximately 10,000 units per year from a previous high of 50,000 units. The doll house has been redesigned recently and is considered by company officials to be comparable to its competitors' models. The company plans to redesign the doll house each year in order to compete effectively. Joan Blocke, the sales manager, is not sure how many units can be sold next year, but she is willing to place probabilities on her estimates. Blocke's estimates of the number of units which can be sold during the next year and the related probabilities are as follows:

The units would be sold for Rs 20 each.

The inability to estimate the sales more precisely is a problem for Jackston. The number of units of this product is small enough to schedule the entire Year's sales in one production run. If the demand is greater than the number of units manufactured, then sales would be lost. If the demand is below supply, the extra units cannot be carried over to the next session and would be given away to various charitable organisations. The production and distribution cost estimates are listed here.

The company intends to analyse the data to facilitate making a decision as to the proper size of the production run. Prepare a paY-offtable for the different sizes of production runs required to meet the four sales estimates prepared by Joan Blocke for Jackston, Inc. If Jackston, Inc. relied solely on the expected monetary value approach to make decision, what size of production run would be selected?

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Estimated sales in units 20,000 Probability 0.10 30,000 40,000 0.40 0.30 50,000 0.20