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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
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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An entrepreneur is planning to market a new brand of bottled unsweetened, organic iced tea. The revenue on each bottle of iced tea 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 iced tea. A small bottling plant will have an annual operating cost of $176K 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 600K bottles per year. Three levels of demand are considered likely: 10,000, 100,000 and 500,000 bottles per year. Complete parts (a) through (i) below. Demand 10,000 100,000 500,000 Event Small plant Large plant 10,000 100.000 500,000 Probability 0.5 0.3 0.2 CES 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 choice. (Do not include the $ symbol in your answers.) ⒸA. Action OB. Event Install Do Not Install 75 Action 150 300
Transcribed Image Text:An entrepreneur is planning to market a new brand of bottled unsweetened, organic iced tea. The revenue on each bottle of iced tea 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 iced tea. A small bottling plant will have an annual operating cost of $176K 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 600K bottles per year. Three levels of demand are considered likely: 10,000, 100,000 and 500,000 bottles per year. Complete parts (a) through (i) below. Demand 10,000 100,000 500,000 Event Small plant Large plant 10,000 100.000 500,000 Probability 0.5 0.3 0.2 CES 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 choice. (Do not include the $ symbol in your answers.) ⒸA. Action OB. Event Install Do Not Install 75 Action 150 300
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