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A product manager of an electronic manufacturing company wants to decide which one of three prototypes of Connecting Devices to produce. Connecting devices act as middleware between networks or computers by binding the network media together. Some of the common connecting devices are routers, bridges, hubs, repeaters, gateways, and switches. The fixed and variable costs of three types of Connecting Devices are shown in the accompanying table. Connecting Devices Type A Type B Type C Fixed Cost (S) 900,000 1,150,000 1,400,000 Variable Cost Per Unit ($) 20 17 15 The manager believes that demand for Connecting Devices types A, B, and C will be 50,000, 100,000, or 150,000 Connecting Devices, with probabilities of 30%, 30%, and 40%, respectively. The selling price of the Connecting Devices will be $40. a) Develop decision three for this problem. b) Find the expected monetary value for each type, and select the optimal one.

A product manager of an electronic manufacturing company wants to decide which one of three prototypes of Connecting Devices to produce. Connecting devices act as middleware between networks or computers by binding the network media together. Some of the common connecting devices are routers, bridges, hubs, repeaters, gateways, and switches. The fixed and variable costs of three types of Connecting Devices are shown in the accompanying table. Connecting Devices Type A Type B Type C Fixed Cost (S) 900,000 1,150,000 1,400,000 Variable Cost Per Unit ($) 20 17 15 The manager believes that demand for Connecting Devices types A, B, and C will be 50,000, 100,000, or 150,000 Connecting Devices, with probabilities of 30%, 30%, and 40%, respectively. The selling price of the Connecting Devices will be $40. a) Develop decision three for this problem. b) Find the expected monetary value for each type, and select the optimal one.

Practical Management Science
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 3: A product manager of an electronic manufacturing company wants to decide which one of three prototypes of Connecting Devices to produce. Connecting devices act as middleware between networks or computers by binding the network media together. Some of the common connecting devices are routers, bridges, hubs, repeaters, gateways, and switches. The fixed and variable costs of three types of Connecting Devices are shown in the accompanying table. Connecting Devices Type A Type B Type C Fixed Cost ($) 900,000 1,150,000 1,400,000 Variable Cost Per Unit ($) 20 17 15 The manager believes that demand for Connecting Devices types A, B, and C will be 50,000, 100,000, or 150,000 Connecting Devices, with probabilities of 30%, 30%, and 40%, respectively. The selling price of the Connecting Devices will be $40. a) Develop decision three for this problem. b) Find the expected monetary value for each type, and select the optimal one.
Transcribed Image Text:Question 3: A product manager of an electronic manufacturing company wants to decide which one of three prototypes of Connecting Devices to produce. Connecting devices act as middleware between networks or computers by binding the network media together. Some of the common connecting devices are routers, bridges, hubs, repeaters, gateways, and switches. The fixed and variable costs of three types of Connecting Devices are shown in the accompanying table. Connecting Devices Type A Type B Type C Fixed Cost ($) 900,000 1,150,000 1,400,000 Variable Cost Per Unit ($) 20 17 15 The manager believes that demand for Connecting Devices types A, B, and C will be 50,000, 100,000, or 150,000 Connecting Devices, with probabilities of 30%, 30%, and 40%, respectively. The selling price of the Connecting Devices will be $40. a) Develop decision three for this problem. b) Find the expected monetary value for each type, and select the optimal one.
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