A company's production manager is trying to determine the quantity of sensors to produce next year. The unit cost of producing the sensor is $22 and it will be sold at $34. Sensors that are not purchased can be sold on the secondary market for a 30% discount. The manager analyzing historical data to find that the number of sensors sold is normally distributed with a mean of 600 and standard deviation of 90. If the critical fractile is 54%, what is the optimal number of sensors to be produced next year?

A company's production manager is trying to determine the quantity of sensors to produce next year. The unit cost of producing the sensor is $22 and it will be sold at $34. Sensors that are not purchased can be sold on the secondary market for a 30% discount. The manager analyzing historical data to find that the number of sensors sold is normally distributed with a mean of 600 and standard deviation of 90. If the critical fractile is 54%, what is the optimal number of sensors to be produced next year?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

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A company's production manager is trying to determine the quantity of sensors to produce next year.
The unit cost of producing the sensor is $22 and it will be sold at $34. Sensors that are not purchased
can be sold on the secondary market for a 30% discount. The manager analyzing historical data to find
that the number of sensors sold is normally distributed with a mean of 600 and standard deviation of
90. If the critical fractile is 54%, what is the optimal number of sensors to be produced next year?
NOTE: No information is needed from other reports.
A. 710
B.
C. 609
D.
601
E.
610
621

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