P471-05
| Acme single-stage new product decision |
| Decision 1: Continue development and market the new product |
| Fixed cost |
$6,000 |
| Unit margin |
$18 |
| Market |
Probability |
Sales volume |
Net revenue |
| Great |
0.45 |
600 |
$10,800 |
| Fair |
0.35 |
300 |
$5,400 |
| Awful |
0.20 |
90 |
$1,620 |
| EMV |
$1,074 |
| Decision 2: Stop development and abandon product |
| No payoffs, no costs, no uncertainty |
| EMV |
$0 |
| 1. Sensitivity to probability in cell B8 (Use one-way data table) |
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| 2. Explain the data table results. |
All monetary values (except the unit margin in cell B5) are in $1000s, and all sales volumes are in 1000s of units.
P502-39
| Automobile inspections |
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| Given Probabilities: |
Probability |
| P(inspected car has problems) |
| P(inspected car has no problems) |
| P(no problem found | inspected car has problems) |
| P(problem found | inspected car has problems) |
| P(no problem found | inspected car has no problems) |
| P(problem found | inspected car has no problems) |
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| 1. The goal is to find P(inspected car has problems | no problem was found). |
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| P(inspected car has problems | no problem was found) = |
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| P(inspected car has problems AND no problem found)/P(no problem found) = |
| P(no problem found | inspected car has problems)*P(inspected car has problems)/ |
| (P(no problem found | inspected car has problems)*P(inspected car has problems) + |
| P(no problem found | inspected car has no problems)*P(inspected car has no problems)) |
| which is equal to …(results) |
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| 2. Provide a brief clarification discussion about your results. |
