Operations Management: Processes And Supply Chains (12th Global Edition) - Does Not Include Mylab Operations Management
Operations Management: Processes And Supply Chains (12th Global Edition) - Does Not Include Mylab Operations Management
12th Edition
ISBN: 9780134890357
Author: Lee J. Krajewski, Manoj K. Malhotra
Publisher: Pearson Global Edition
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Chapter 4, Problem 20P

Dawson Electronics is a manufacturer of high-tech control modules for lawn sprinkler systems. Denise, the CEO, is trying to decide if the company should develop one of the two potential new products, the Water Saver 1000 or the Greener Grass 5000. With each product, Dawson can capture a bigger market share if it chooses to expand capacity by buying additional machines. Given different demand scenarios, their probabilities of occurrence, and capacity expansion versus no change in capacity, the potential sales of each product are summarized in Table 4.5.

Chapter 4, Problem 20P, Dawson Electronics is a manufacturer of high-tech control modules for lawn sprinkler systems.

  1. What is the expected payoff for Water Saver 1000 and the Greener Grass 5000, with and without capacity expansion?
  2. Which product should Denise choose to produce, and with which capacity expansion option?

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