McBurger, Inc., wants to redesign its kitchens to improve productivity and quality. Three​ designs, called designs​ K1, K2, and​ K3, are under consideration. No matter which design is​ used, daily production of sandwiches at a typical McBurger restaurant is for 600 sandwiches. A sandwich costs $1.30 to produce.​ Non-defective sandwiches​ sell, on the​ average, for $2.50 per sandwich. Defective sandwiches cannot be sold and are scrapped.   The goal is to choose a design that maximizes the expected profit at a typical restaurant over a​ 300-day period. Designs​ K1, K2, and K3 cost $115,000​, $140,000​, and $170,000​, respectively.   Under design​ K1, there is a .80 chance that 90 out of each 100 sandwiches are​ non-defective and a .20 chance that 70 out of each 100 sandwiches are​ non-defective. Under design​ K2, there is a .85 chance that 90 out of each 100 sandwiches are​ non-defective and a .15 chance that 75 out of each 100 sandwiches are​ non-defective. Under design​ K3, there is a .90 chance that 95 out of each 100 sandwiches are​ non-defective and a .10 chance that 80 out of each 100 sandwiches are​ non-defective. The expected profit level of design K1 is ​$nothing. ​(Enter your response as a real number rounded to two decimal places.​) The expected profit level of design K2 is ​$nothing. ​(Enter your response as a real number rounded to two decimal places.​) The expected profit level of design K3 is ​$nothing. ​(Enter your response as a real number rounded to two decimal places.​)

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...
icon
Related questions
Question
100%
​McBurger, Inc., wants to redesign its kitchens to improve productivity and quality. Three​ designs, called designs​ K1, K2, and​ K3, are under consideration. No matter which design is​ used, daily production of sandwiches at a typical McBurger restaurant is for
600
sandwiches. A sandwich costs
$1.30
to produce.​ Non-defective sandwiches​ sell, on the​ average, for
$2.50
per sandwich. Defective sandwiches cannot be sold and are scrapped.
 
The goal is to choose a design that maximizes the expected profit at a typical restaurant over a​ 300-day period. Designs​ K1, K2, and K3 cost
$115,000​,
$140,000​,
and
$170,000​,
respectively.
 
Under design​ K1, there is a .80 chance that 90 out of each 100 sandwiches are​ non-defective and a .20 chance that 70 out of each 100 sandwiches are​ non-defective. Under design​ K2, there is a .85 chance that 90 out of each 100 sandwiches are​ non-defective and a .15 chance that 75 out of each 100 sandwiches are​ non-defective. Under design​ K3, there is a .90 chance that 95 out of each 100 sandwiches are​ non-defective and a .10 chance that 80 out of each 100 sandwiches are​ non-defective.
The expected profit level of design K1 is
​$nothing.
​(Enter
your response as a real number rounded to two decimal
places.​)
The expected profit level of design K2 is
​$nothing.
​(Enter
your response as a real number rounded to two decimal
places.​)
The expected profit level of design K3 is
​$nothing.
​(Enter
your response as a real number rounded to two decimal
places.​)
What is the expected profit level of the design that achieves the maximum expected​ 300-day profit​ level?
 
Design
 
K2
K1
K3
achieves the maximum expected​ 300-day profit​ level, with a profit of
​$nothing.
​(Enter
your response as a real number rounded to two decimal
places.​)
### McBurger, Inc. Kitchen Redesign Analysis

**Objective:** 
McBurger, Inc. aims to redesign its kitchens to boost productivity and quality. Three designs, K1, K2, and K3, are being considered. The chosen design should maximize expected profits at a typical McBurger restaurant over a 300-day period.

**Details:**
- **Production:** Daily production at each restaurant is 600 sandwiches.
- **Costs and Sales:**
  - Production cost per sandwich: $1.30
  - Sale price of non-defective sandwich: $2.50
  - Defective sandwiches are scrapped with no revenue generated.
- **Design Costs:**
  - Design K1: $115,000
  - Design K2: $140,000
  - Design K3: $170,000

**Probabilities of Non-defective Sandwiches:**
- **Design K1:**
  - 0.80 chance that 90/100 sandwiches are non-defective.
  - 0.20 chance that 70/100 sandwiches are non-defective.
- **Design K2:**
  - 0.85 chance that 90/100 sandwiches are non-defective.
  - 0.15 chance that 75/100 sandwiches are non-defective.
- **Design K3:**
  - 0.90 chance that 95/100 sandwiches are non-defective.
  - 0.10 chance that 80/100 sandwiches are non-defective.

**Calculations Required:**
- Calculate the expected profit level of each design (K1, K2, K3).
- Determine which design maximizes the expected 300-day profit level.

**Answer Input Fields:**
1. **Expected Profit Level:**
   - The expected profit level for design K1 is $______. (rounded to two decimal places)
   - The expected profit level for design K2 is $______. (rounded to two decimal places)
   - The expected profit level for design K3 is $______. (rounded to two decimal places)
2. **Maximum Profit Achieving Design:**
   - Design ______ achieves the maximum expected 300-day profit level, with a profit of $_______. (rounded to two decimal places)

Enter your calculated responses in each designated answer box.
Transcribed Image Text:### McBurger, Inc. Kitchen Redesign Analysis **Objective:** McBurger, Inc. aims to redesign its kitchens to boost productivity and quality. Three designs, K1, K2, and K3, are being considered. The chosen design should maximize expected profits at a typical McBurger restaurant over a 300-day period. **Details:** - **Production:** Daily production at each restaurant is 600 sandwiches. - **Costs and Sales:** - Production cost per sandwich: $1.30 - Sale price of non-defective sandwich: $2.50 - Defective sandwiches are scrapped with no revenue generated. - **Design Costs:** - Design K1: $115,000 - Design K2: $140,000 - Design K3: $170,000 **Probabilities of Non-defective Sandwiches:** - **Design K1:** - 0.80 chance that 90/100 sandwiches are non-defective. - 0.20 chance that 70/100 sandwiches are non-defective. - **Design K2:** - 0.85 chance that 90/100 sandwiches are non-defective. - 0.15 chance that 75/100 sandwiches are non-defective. - **Design K3:** - 0.90 chance that 95/100 sandwiches are non-defective. - 0.10 chance that 80/100 sandwiches are non-defective. **Calculations Required:** - Calculate the expected profit level of each design (K1, K2, K3). - Determine which design maximizes the expected 300-day profit level. **Answer Input Fields:** 1. **Expected Profit Level:** - The expected profit level for design K1 is $______. (rounded to two decimal places) - The expected profit level for design K2 is $______. (rounded to two decimal places) - The expected profit level for design K3 is $______. (rounded to two decimal places) 2. **Maximum Profit Achieving Design:** - Design ______ achieves the maximum expected 300-day profit level, with a profit of $_______. (rounded to two decimal places) Enter your calculated responses in each designated answer box.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Introduction to Forecasting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.