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Problem #4 - The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard deviation is 100 units. a. If the number of air conditioning units assembled per month follows a normal distribution, calculate the probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point calculated in problem 3-a. An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from $250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process b.

Problem #4 - The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard deviation is 100 units. a. If the number of air conditioning units assembled per month follows a normal distribution, calculate the probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point calculated in problem 3-a. An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from $250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process b.

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.1: Measures Of Center
Problem 4GP
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Problem #4 - The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard deviation is 100 units. If the number of air conditioning units assembled per month follows a normal distribution, calculate the a. probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point calculated in problem 3-a. b. An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from $250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process improvement initiative. с. If the number of air conditioning units assembled per month still follows a normal distribution after the implementation of the improvements described on item (b), calculate the probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the new monthly break-even point. Now that you know this probability, would you change your recommendation? Justify. Discussion Question #1 - Using your "own words", discuss the differences among decision making under certainty, decision making under risk, and decision making under uncertainty. Provide an example for each one of them. Discussion Question #2 - Using your "own words", discuss how the coefficient of determination and the coefficient of correlation are related and how would you use them in regression analysis.
Transcribed Image Text:Problem #4 - The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard deviation is 100 units. If the number of air conditioning units assembled per month follows a normal distribution, calculate the a. probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point calculated in problem 3-a. b. An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from $250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process improvement initiative. с. If the number of air conditioning units assembled per month still follows a normal distribution after the implementation of the improvements described on item (b), calculate the probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the new monthly break-even point. Now that you know this probability, would you change your recommendation? Justify. Discussion Question #1 - Using your "own words", discuss the differences among decision making under certainty, decision making under risk, and decision making under uncertainty. Provide an example for each one of them. Discussion Question #2 - Using your "own words", discuss how the coefficient of determination and the coefficient of correlation are related and how would you use them in regression analysis.
Problem #3: Rnow that at break-even, revenue must be equat to cost. Here we have a variable cost of $5004a manthiy Fixed Cost of sa50, 0O A:)/owe can represent it as a Function C(x)-560X+250,000, we where x is the 'number of units sold. we aiso know they sell eacah unit at lo00,30 revenue funtion RY)=1000x At break even point, total revenue lo00X=500X+250,000 total cost solving we get, 500x= 250,000 %3D X=200,000/500 =500 3o Freeze Inc. must sell S00 unito per month to meet break-eURn conditions.
Transcribed Image Text:Problem #3: Rnow that at break-even, revenue must be equat to cost. Here we have a variable cost of $5004a manthiy Fixed Cost of sa50, 0O A:)/owe can represent it as a Function C(x)-560X+250,000, we where x is the 'number of units sold. we aiso know they sell eacah unit at lo00,30 revenue funtion RY)=1000x At break even point, total revenue lo00X=500X+250,000 total cost solving we get, 500x= 250,000 %3D X=200,000/500 =500 3o Freeze Inc. must sell S00 unito per month to meet break-eURn conditions.
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