Question 1(a) Loraine Corporation is planning to market a new makeup product. According to theanalysis made by the financial department of the company, it will earn an annual profitof $4.5 million if this product has high sales, an annual profit of $1.2 million if the salesare mediocre, and it will lose $2.3 million a year if the sales are low. The probabilitiesof these three scenarios are 0.32, 0.51 and 0.17 respectively.i.Let x be the profits (in millions of dollars) earned per annum by the companyfrom this product. Write the probability distribution of x.ii.Calculate the mean and standard deviations of x.

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Answered: (a) Loraine Corporation is planning to…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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A city manager is considering three strategies for a $1,000 investment. The probable returns areestimated as follows:• Strategy 1: A profit of $5, 000 with a probability of 0.20 and a loss of $1, 000 with a probability of0.80.• Strategy 2: A profit of $2, 000 with a probability of 0.40, a profit of $500 with a probability of0.30 and a loss of $1, 000 with a probability of 0.30.• Strategy 3: A certain profit of $400.(a) Which strategy has the highest expected profit?(b) If the city manager is going to pick only 1 strategy, which of the three strategies would youdefinitely advise against? Provide specific (numeric) details to support your answer.
The following equally likely outcomes have been estimated for the returns on Portfolio G and Portfolio H: Scenario Portfolio G Portfolio H 1 5.0% 9.0% 2 3.0% -7.0% 3 9.0% 15.0% 4 9.0% -4.0% Which of the two portfolios is riskier? a. Portfolio H since it has the possibility of a negative return b. Portfolio G since it has the higher expected return c. Both portfolios are equally risky since the possible returns of each are equally likely to occur d. Portfolio H since its returns are more widely dispersed around the expected…
The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): State of Nature Low Demand Medium Demand High Demand Decision Alternative s1 s2 s3 Manufacture, d1 -20 40 100 Purchase, d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. What is Gorman's optimal decision strategy?Decision strategy:If F then .If U then . What is the expected value of the market research information?Expected value: $ What is the efficiency of the information? If required, round your answer to one decimal place.Efficiency:
Suppose a distribution center is considering three options for expansion. The first one is to expand into a new plant, the second to add on third-shift to the daily schedule, and third, a small expansion to the existing facility. There are three possibilities for demand. These are high, medium, and low having probabilities of 40%, 33%, and 27% respectively. Suppose that the profits for the expansion plans are as follows: The new plant expected outcomes are $110,000, $50,000, -$15,000, the third shift consideration would result in outcomes of $40,000, $20,000, $-5,000 and the small expansion choice would in the following dollar amounts $15,000, $13,000, -$1,500. The amount that the company must invest in each alternative is: new plant = $48,000, third shift = $15,100, small expansion = $8,700 a. The profit/loss (EMV) for the new plant is $ [Select] b. The profit/loss (EMV) for adding a third shift is $ [Select] c. The profit/loss (EMV) for the small expansion is $ [Select] d. Which of…
An amount of $10,000 is to be invested for three years. The yield rate for the first year will be equally likely to be 5%, 6%, 7%, 8% or 9%; for the second year will be equally likely to be 7% or 9%; for the third year will be 7%, 8% or 9% with probabilities 0.3, 0.5 and 0.2, respectively. The yield rates in different years are independent. Find the probability that the accumulation of the investment for the three years will be greater than its expected value.
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4. A merchant stocks a certain perishable item. He knows that on any given day, he will have a demand for either 2, 3, or 4 of this items with probabilities 0.1, 0.4 and 0.5 respectively. What is the average daily demand?
You have done risk analysis and determine the following risks and their probabilities could affect your project. Based on these risks, what should you contingency reserve be? Risk 1: 50% chance of a weather delay costing $5,000Risk 2: 20% chance of a worker strike costing $10,000Risk 3: 10% chance of catastrophic failure costing $50,000
b) Blue Star United, a major electronics distributor, has hired Southwest Forecasters, a market research firm, to predict the level of demand for its new product that combines cell phone and complete Internet capabilities at a price substantially below its major competitors. As part of its deliverables, Southwest provides a rating of Poor, Fair, or Good, on the basis of its research. Prior to engaging Southwest Blue Star, management concluded the following probabilities for the market-demand levels: P(Low)== P(s1) = 0.1 P(Moderate) = P(s2) = 0.5 P(High) = P(s3) = 0.4 Southwest completes its study and concludes that the market potential for this product is poor. What conclusion should Blue Star reach based on the market-study results? Proportion of Assessments Provided by a Market-Research Organization Prior to Various Levels of Market Demand (Conditional Probabilities) are given in, the following table: Market Demand That Actually Occurred After Assessment Was Provided Moderate Demand…

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