Consider the two capacity options for Arktec Manufacturing shown below. Suppose the company has identified the following three possible demand scenarios. Fixed cost (per year) Variable cost (per unit) Option 1 $600 comma 000600,000 $55 Option 2 $150 comma 000150,000 $1616 Demand (units per year) Probability 20 comma 00020,000 4040 % 55 comma 00055,000 5050 % 190 comma 000190,000 1010% a. The expected cost for Option 1 is Senter your response here. (Enter your response as a whole number.)

Consider the two capacity options for Arktec Manufacturing shown below. Suppose the company has identified the following three possible demand scenarios. Fixed cost (per year) Variable cost (per unit) Option 1 $600 comma 000600,000 $55 Option 2 $150 comma 000150,000 $1616 Demand (units per year) Probability 20 comma 00020,000 4040 % 55 comma 00055,000 5050 % 190 comma 000190,000 1010% a. The expected cost for Option 1 is Senter your response here. (Enter your response as a whole number.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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