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The J. R. Ryland Computer Company is considering a plant expansion to enable the company to begin production of a new computer product. The company's president must determine whether to make the expansion a medium- or large-scale project. Demand for the new product is uncertain, which for planning purposes may be low demand, medium demand, or high demand. The probability estimates for demand are 0.30, 0.50, and 0.20 respectively. Letting x and y indicate the annual profit in thousands of dollars, the firm's planners developed the following profit forecasts for the medium- and large-scale expansion projects. Medium-Scale Expansion Profit Large-Scale Expansion Profit f(x) y f(y) Low 50 0.30 0.30 Demand Medium 150 0.50 100 0.50 High 200 0.20 300 0.20 (a) Compute the expected value (in thousands of dollars) for the profit associated with the two expansion alternatives. Medium-Scale |thousand dollars Large-Scale thousand dollars Which decision is preferred for the objective of maximizing the expected profit? The -Select--- v Expansion Profit forecast is preferred for the objective of maximizing the expected profit. (b) Compute the variance for the profit associated with the two expansion alternatives. Medium-Scale Large-Scale Which decision is preferred for the objective of minimizing risk or uncertainty? The --Select-- V Expansion Profit forecast is preferred for the objective of minimizing risk or uncertainty.

The J. R. Ryland Computer Company is considering a plant expansion to enable the company to begin production of a new computer product. The company's president must determine whether to make the expansion a medium- or large-scale project. Demand for the new product is uncertain, which for planning purposes may be low demand, medium demand, or high demand. The probability estimates for demand are 0.30, 0.50, and 0.20 respectively. Letting x and y indicate the annual profit in thousands of dollars, the firm's planners developed the following profit forecasts for the medium- and large-scale expansion projects. Medium-Scale Expansion Profit Large-Scale Expansion Profit f(x) y f(y) Low 50 0.30 0.30 Demand Medium 150 0.50 100 0.50 High 200 0.20 300 0.20 (a) Compute the expected value (in thousands of dollars) for the profit associated with the two expansion alternatives. Medium-Scale |thousand dollars Large-Scale thousand dollars Which decision is preferred for the objective of maximizing the expected profit? The -Select--- v Expansion Profit forecast is preferred for the objective of maximizing the expected profit. (b) Compute the variance for the profit associated with the two expansion alternatives. Medium-Scale Large-Scale Which decision is preferred for the objective of minimizing risk or uncertainty? The --Select-- V Expansion Profit forecast is preferred for the objective of minimizing risk or uncertainty.

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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The J. R. Ryland Computer Company is considering a plant expansion to enable the company to begin production of a new computer product. The company's president must determine whether to make the expansion a medium- or large-scale project. Demand for the new product is uncertain, which for planning purposes may be low demand, medium demand, or high demand. The probability estimates for demand are 0.30, 0.50, and 0.20, respectively. Letting x and y indicate the annual profit in thousands of dollars, the firm's planners developed the following profit forecasts for the medium- and large-scale expansion projects. Medium-Scale Large-Scale Expansion Profit Expansion Profit f(x) y f(y) Low 50 0.30 0.30 Demand Medium 150 0.50 100 0.50 High 200 0.20 300 0.20 (a) Compute the expected value (in thousands of dollars) for the profit associated with the two expansion alternatives. Medium-Scale thousand dollars Large-Scale thousand dollars Which decision is preferred for the objective of maximizing the expected profit? The -Select--- V Expansion Profit forecast is preferred for the objective of maximizing the expected profit. (b) Compute the variance for the profit associated with the two expansion alternatives. Medium-Scale Large-Scale Which decision is preferred for the objective of minimizing risk or uncertainty? The -Select--- v Expansion Profit forecast is preferred for the objective of minimizing risk or uncertainty.
Transcribed Image Text:The J. R. Ryland Computer Company is considering a plant expansion to enable the company to begin production of a new computer product. The company's president must determine whether to make the expansion a medium- or large-scale project. Demand for the new product is uncertain, which for planning purposes may be low demand, medium demand, or high demand. The probability estimates for demand are 0.30, 0.50, and 0.20, respectively. Letting x and y indicate the annual profit in thousands of dollars, the firm's planners developed the following profit forecasts for the medium- and large-scale expansion projects. Medium-Scale Large-Scale Expansion Profit Expansion Profit f(x) y f(y) Low 50 0.30 0.30 Demand Medium 150 0.50 100 0.50 High 200 0.20 300 0.20 (a) Compute the expected value (in thousands of dollars) for the profit associated with the two expansion alternatives. Medium-Scale thousand dollars Large-Scale thousand dollars Which decision is preferred for the objective of maximizing the expected profit? The -Select--- V Expansion Profit forecast is preferred for the objective of maximizing the expected profit. (b) Compute the variance for the profit associated with the two expansion alternatives. Medium-Scale Large-Scale Which decision is preferred for the objective of minimizing risk or uncertainty? The -Select--- v Expansion Profit forecast is preferred for the objective of minimizing risk or uncertainty.
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