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Suppose a distribution center is considering three options for expansion. The first one is to expand into a new plant, the second to add on third-shift to the daily schedule, and third, a small expansion to the existing facility. There are three possibilities for demand. These are high, medium, and low having probabilities of 40%, 33%, and 27% respectively. Suppose that the profits for the expansion plans are as follows: The new plant expected outcomes are $110,000, $50,000, -$15,000, the third shift consideration would result in outcomes of $40,000, $20,000, $-5,000 and the small expansion choice would in the following dollar amounts $15,000, $13,000,-$1,500. The amount that the company must invest in each alternative is: new plant = $48,000, third shift = $15,100, small expansion = $8,700 a. The profit/loss (EMV) for the new plant is $ [Select] b. The profit/loss (EMV) for adding a third shift is $ [Select] c. The profit/loss (EMV) for the small expansion is $ [Select]

Suppose a distribution center is considering three options for expansion. The first one is to expand into a new plant, the second to add on third-shift to the daily schedule, and third, a small expansion to the existing facility. There are three possibilities for demand. These are high, medium, and low having probabilities of 40%, 33%, and 27% respectively. Suppose that the profits for the expansion plans are as follows: The new plant expected outcomes are $110,000, $50,000, -$15,000, the third shift consideration would result in outcomes of $40,000, $20,000, $-5,000 and the small expansion choice would in the following dollar amounts $15,000, $13,000,-$1,500. The amount that the company must invest in each alternative is: new plant = $48,000, third shift = $15,100, small expansion = $8,700 a. The profit/loss (EMV) for the new plant is $ [Select] b. The profit/loss (EMV) for adding a third shift is $ [Select] c. The profit/loss (EMV) for the small expansion is $ [Select]

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Suppose a distribution center is considering three options for expansion. The first one is to expand into a new plant, the second to add on third-shift to the daily schedule, and third, a small expansion to the existing facility. There are three possibilities for demand. These are high, medium, and low having probabilities of 40%, 33%, and 27% respectively. Suppose that the profits for the expansion plans are as follows: The new plant expected outcomes are $110,000, $50,000, -$15,000, the third shift consideration would result in outcomes of $40,000, $20,000, $-5,000 and the small expansion choice would in the following dollar amounts $15,000, $13,000, -$1,500. The amount that the company must invest in each alternative is: new plant = $48,000, third shift = $15,100, small expansion = $8,700 a. The profit/loss (EMV) for the new plant is $ [Select] b. The profit/loss (EMV) for adding a third shift is $ [Select] c. The profit/loss (EMV) for the small expansion is $ [Select] d. Which of the expansion plans should the manager choose? [Select] e. What if an outside consultant was hired by the organization and the probabilities were re-evaluated as a result of better information. The results of the research/feedback are now: 30%, 37%, 33% (high, medium, low). What choice should the manager make and what is the EMV? [Select]
Transcribed Image Text:Suppose a distribution center is considering three options for expansion. The first one is to expand into a new plant, the second to add on third-shift to the daily schedule, and third, a small expansion to the existing facility. There are three possibilities for demand. These are high, medium, and low having probabilities of 40%, 33%, and 27% respectively. Suppose that the profits for the expansion plans are as follows: The new plant expected outcomes are $110,000, $50,000, -$15,000, the third shift consideration would result in outcomes of $40,000, $20,000, $-5,000 and the small expansion choice would in the following dollar amounts $15,000, $13,000, -$1,500. The amount that the company must invest in each alternative is: new plant = $48,000, third shift = $15,100, small expansion = $8,700 a. The profit/loss (EMV) for the new plant is $ [Select] b. The profit/loss (EMV) for adding a third shift is $ [Select] c. The profit/loss (EMV) for the small expansion is $ [Select] d. Which of the expansion plans should the manager choose? [Select] e. What if an outside consultant was hired by the organization and the probabilities were re-evaluated as a result of better information. The results of the research/feedback are now: 30%, 37%, 33% (high, medium, low). What choice should the manager make and what is the EMV? [Select]
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