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) | |||
| 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 | ||
| 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) | ||
| 1. The goal is to find P(inspected car has problems | no problem was found). | ||
| P(inspected car has problems | no problem was found) = | ||
| 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) | ||
| 2. Provide a brief clarification discussion about your results. |