An entrepreneur is planning to market a new brand of bottled unsweetened, organic iced tea. The revenue on each bottle of iced ea to be sold has been determined to be $2.33 The entrepeneur needs to decide on the size of of the bottling plan to produce the ced tea. A small bottling plant will have an annual operating cost of 5176K and be able to fill 238K bottles per year. A large bottling plant will have an annual operating cost of $348K and be able to fill 500K bottles per year. Three levels of demand are considered ikely: 10,000, 100,000 and 500,000 bottles per year. Complete parts (a) through (i) below. Demand 10,000 100,000 500,000 Probability 0.5 0.3 0.2 a. Construct a payoff table, indicating the events and alternative courses of action. Select the correct answer below and fill in the answer boxes to complete your choi Do not include the $ symbol in your answers) OA. Action Event Small plant Large plant 10,000 100.000 500,000 OB. Event Install Do Not Install 75 Action 150 300
An entrepreneur is planning to market a new brand of bottled unsweetened, organic iced tea. The revenue on each bottle of iced ea to be sold has been determined to be $2.33 The entrepeneur needs to decide on the size of of the bottling plan to produce the ced tea. A small bottling plant will have an annual operating cost of 5176K and be able to fill 238K bottles per year. A large bottling plant will have an annual operating cost of $348K and be able to fill 500K bottles per year. Three levels of demand are considered ikely: 10,000, 100,000 and 500,000 bottles per year. Complete parts (a) through (i) below. Demand 10,000 100,000 500,000 Probability 0.5 0.3 0.2 a. Construct a payoff table, indicating the events and alternative courses of action. Select the correct answer below and fill in the answer boxes to complete your choi Do not include the $ symbol in your answers) OA. Action Event Small plant Large plant 10,000 100.000 500,000 OB. Event Install Do Not Install 75 Action 150 300
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...
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