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- A chemical manufacturer uses chemicals 1 and 2 to produce two drugs. Drug 1 must be at least 80% chemical 2 and drug 2 must be at least 75% chemical 1. Up to 70,000 ounces of drug 1 can be sold at $40 per ounce; up to 50,000 ounces of drug 2 can be sold at $15 per ounce. Up to 65,000 ounces of chemical 1 and up to 42,000 ounces of chemical 2 can be purchased. Formulate this problem as a linear programming model (using algebraic notation) to determine how to maximize the manufacturer's revenue. (You only need to formulate this problem as an algebraic model. No Excel spreadsheet model. No need to solve the model.)If a good is valued at $55,000 by the buyer and $47,000 by the seller, what amount of tax would result in an unconsummated transaction? Group of answer choices the transaction would never take place even if there wasn't a tax a tax of $7,999.99 a tax of $1,500 a tax of $9,000Given attribute cutoffs of Price = 5, Quality = 5, and Weight = 4, which of the following would be chosen using the disjunctive decision rule? Price Quality Ease of Use Multiple Choice HP HP 5 3 3 Dell Dell Samsung 4 4 3 3 Samsung 5 ны Samsung and Dell would be considered further. 1 Samsung and HP would be considered further.
- Bargaining power of customers is likely to be the lowest for markets involving Apparel Automobiles Patented drugs InsuranceEXAMPLE 18.3 Micro Pizza Heater: Market Demand A factory renovation is needed to build a compact microwave with a new shape, which will be called the Micro Pizza Heater. The low sales-volume prediction (20,000 heaters per year) has a subjectively estimated probability of 30%. The most likely market prediction is 30,000 units sold per year. The optimistic market prediction (30,000 sold the first year, with annual increases of 5000) has a subjectively estimated probability of 10%. In all cases, the factory equipment and the market will last 5 years. The net revenue will be $10 per microwave. What is the probability distribution for the net revenue?true or false If profit (∏=TR−TC∏=TR−TC) is equal to zero, the entrepreneur has earned nothing for his talent and risk taking.
- For the entry deterrence example we discussed today, [Market demand Q(p) = 100 p. the incumbent firm's marginal cost MC = 20, the entrant's marginal cost MC = 20] (A) The incumbent firm's strategy if F = 300 will be entry deterrence. (F is the Entrant's fixed entry cost.) (B) If F = 300 entry deterrence is socially optimal. * (A) is true; (B) is false (A) is false; (B) is true Both (A) and (B) are false Both (A) and (B) are trueA total of 10 players are each choosing a number from {0,1,2,3,4,5,6,7,8}. If a player's number equals exactly half of the average of the numbers submitted by the other nine players, then she is paid $100; otherwise, she is paid 0. Solve for the strategies that survive the IDSDS.The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. Use expected value to recommend a decision. b. Use EVPI to determine whether Gorman should attempt to obtain a better estimate of demand.
- The next two questions are based on the following information: Sallie produces specialty T-shirts that are sold at special events. For an upcoming event, she can sell each T-shirt at $20 per shirt. However, when the event ends, any unsold T-shirts will be sold at a clearance price of $4 per shirt. It costs Sally $8 to make a T-shirt. Sally's estimate of the demand is the following. Demand Probability 300 0.05 400 0.1 500 0.4 600 0.3 700 0.1 800 0.05 Fill in the blank: The critical ratio is $a Company should never enter a market where political risk is high. A) True B) Falsek : ces As the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes before you learn how strong demand is for homes in this large neighborhood. There is a 50 percent chance of low demand and a 50 percent chance of high demand. The corresponding (inverse) demand functions for these two scenarios are P= 300,000-400Q and P= 500,000 -225Q, respectively. Your cost function is CQ) = 165,000+ 243,750Q. How many new homes should you build, and what profits can you expect? Number of homes you should build: homes Profits you can expect: $1