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 for600sandwiches. A sandwich costs$1.30to produce. Non-defective sandwiches sell, on the average, for$2.50per 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.(Enteryour response as a real number rounded to two decimalplaces.)The expected profit level of design K2 is$nothing.(Enteryour response as a real number rounded to two decimalplaces.)The expected profit level of design K3 is$nothing.(Enteryour response as a real number rounded to two decimalplaces.)What is the expected profit level of the design that achieves the maximum expected 300-day profit level? Design▼ K2K1K3achieves the maximum expected 300-day profit level, with a profit of$nothing.(Enteryour response as a real number rounded to two decimalplaces.) 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 sandwichesat 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 arescrapped.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 90out 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-defectiveand a .10 chance that 80 out of each 100 sandwiches are non-defective.The expected profit level of design K1 is $(Enter your response as a real number rounded to two decimal places.)The expected profit level of design K2 is $(Enter your response as a real number rounded to two decimal places.)The expected profit level of design K3 is $(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?Designachieves the maximum expected 300-day profit level, with a profit of $(Enter your response as a real number rounded to two decimal places.)Enter your answer in each of the answer boxes.

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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.)

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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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

▼

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., 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 $
(Enter your response as a real number rounded to two decimal places.)
The expected profit level of design K2 is $
(Enter your response as a real number rounded to two decimal places.)
The expected profit level of design K3 is $
(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
achieves the maximum expected 300-day profit level, with a profit of $
(Enter your response as a real number rounded to two decimal places.)
Enter your answer in each of the answer boxes.

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