CProbability 8. Tim Toyne, president of the Tim Toyne Toy Company (a British firm) is currently...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
CProbability 8. Tim Toyne, president of the Tim Toyne Toy Company (a British firm) is currently trying to decide whether he should bring to market his new model toy truck called the T4 (Tim Toyne's Toy Truck). Tim is uncertain about both the potential market for this new toy, and the unit cost of producing it. The estimated net profit to be earned by this new toy depends on these two uncertain factors in the following manner (profit is expressed in millions of pounds): Unit Production Costs (pounds per unit) 1.0 1.5 2.0 Large 10.0 Small 2.0 -2.0 -4.0 Tim must decide within the next week whether or not he should go into production with the T4. If he decides against the introduction of the T4, he will invest his assets in a diversified mutual fund where the returns are also an uncertainty. Tim has asked you, his chief technical business analyst, to help him analyze this situation. You and your team view the market size and production cost as independent random variables and have assessed the following distributions for them: an 8.40 Market Size AN AN Market Size Large Small AM Probability 0.6 0.4 6.0 2.0 The subjective probabilities for various return levels for the mutual fund investment over the same period of time (in millions of pounds) has been assessed using Stuart Varney, a business and financial expert, with the following results: P(<4)=0.99 P(1)-0.75 P<0)=0.50 Production Cost 1.0 1.5 2.0 P<-1)=0.25 P(-2) = 0.01 To assist Tim in his decision, you ask him about his attitude toward risk and he replies, "If you take a big risk you will have a big loss but if you take a small risk you will have only a small loss. Therefore I am neutral toward risk!" He then asks you to answer his basic question, (i.e. which strategy is best?) by Tuesday, December 14, 2021. Graphing paper is attached if you think you need it. When you have finished Part 1 turn it in to receive Part 2 which is a continuation of the Tim Toyne Toy Truck problem. (12 points) 1000 40 030 4:30 400 Probability 0.2 B 0.3 0.5 Complementary Cumulative Probably CProbability 8. Tim Toyne, president of the Tim Toyne Toy Company (a British firm) is currently trying to decide whether he should bring to market his new model toy truck called the T4 (Tim Toyne's Toy Truck). Tim is uncertain about both the potential market for this new toy, and the unit cost of producing it. The estimated net profit to be earned by this new toy depends on these two uncertain factors in the following manner (profit is expressed in millions of pounds): Unit Production Costs (pounds per unit) 1.0 1.5 2.0 Large 10.0 Small 2.0 -2.0 -4.0 Tim must decide within the next week whether or not he should go into production with the T4. If he decides against the introduction of the T4, he will invest his assets in a diversified mutual fund where the returns are also an uncertainty. Tim has asked you, his chief technical business analyst, to help him analyze this situation. You and your team view the market size and production cost as independent random variables and have assessed the following distributions for them: an 8.40 Market Size AN AN Market Size Large Small AM Probability 0.6 0.4 6.0 2.0 The subjective probabilities for various return levels for the mutual fund investment over the same period of time (in millions of pounds) has been assessed using Stuart Varney, a business and financial expert, with the following results: P(<4)=0.99 P(1)-0.75 P<0)=0.50 Production Cost 1.0 1.5 2.0 P<-1)=0.25 P(-2) = 0.01 To assist Tim in his decision, you ask him about his attitude toward risk and he replies, "If you take a big risk you will have a big loss but if you take a small risk you will have only a small loss. Therefore I am neutral toward risk!" He then asks you to answer his basic question, (i.e. which strategy is best?) by Tuesday, December 14, 2021. Graphing paper is attached if you think you need it. When you have finished Part 1 turn it in to receive Part 2 which is a continuation of the Tim Toyne Toy Truck problem. (12 points) 1000 40 030 4:30 400 Probability 0.2 B 0.3 0.5 Complementary Cumulative Probably
Expert Answer:
Answer rating: 100% (QA)
Answer To assist Tim in making his decision regarding the introduction of the T4 toy truck we need t... View the full answer
Related Book For
Posted Date:
Students also viewed these general management questions
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Hot Locks Company developed the following information for its hair dryer sales: Sales price $ 125.00 per unit Variable manufacturing cost $ 44.75 per unit Variable selling expense ...
-
The following transactions of Jeff's Auto Supply occurred in February (Balances as of February 1 are given for general ledger and accounts receivable ledger accounts: Dick, $1,100 Dr.; Metcalf, $200...
-
Marc, age 4 5, sells his personal residence on May 15, 2018, for $180,000. He pays $8,000 in selling expenses and $900 in repair expenses to help sell the residence. He has lived in the residence...
-
Describe the key elements of a customer care programme that would be appropriate in a manufacturing or service environment with which you are familiar.
-
1. Traditionally, Japanese MNEs followed an ethnocentric orientation in international staffing, in which managers from headquarters hold key subsidiary positions. Sony is shifting away from this...
-
Justin is 16. Justin went through puberty early and appears older than he really is. One day after school, Justin gets in a fight with another teenager. Justin is punched in the mouth and his teeth...
-
In this exercise, you create an application that allows the user to enter the gender (either F or M) and GPA for any number of students. The application should calculate the average GPA for all...
-
what are the merits of strategic alliances, and collaborative partnerships for companies racing for global market leadership? Under what circumstances do they make sense? How do they contribute to...
-
The customer has just attended the weekly staff meeting for the infrastructure project and has stated that the market is changing for the product being created. As a result of this, the customer has...
-
Of the following, which is the most comprehensive definition of a project? a. An environment created to deliver a product, service, or result. b. A collaborative enterprise that delivers a product,...
-
A new call center is being built to support a new product at a national telephone company. The company doesnt have any data on how long it will take to sign up customers via the call center. This...
-
There is $150,000 allocated for management reserves. One of the stakeholders is a newly hired vice president who comes from a small company where project management was not formalized, so he is...
-
Three team members have different solutions to a critical path related problem. What is the best method the project manager can use to resolve the conflict? a. Problem solving b. Reward c. Withdrawal...
-
Q2. We usually write numbers in decimal form (or base 10), meaning numbers are composed using 10 different "digits" 0, 1, ..., 9. Sometimes though it is useful to write numbers hexadecimal or base...
-
Discuss whether responsible human resources management should apply different standards for the home company and suppliers, for developed countries and developing countries, and for large companies...
-
For July, Beerton Company had cost of goods manufactured equal to $50,000; direct materials used, $16,000; cost of goods sold, $60,000; direct labor, $24,000; purchases of materials, $25,000; cost of...
-
What is meant by capital expenditure? How does it differ from a revenue expenditure?
-
Differentiate between direct costs and direct costing.
-
Determine whether you can use a normal distribution to approximate the binomial distribution. If you can, find the mean and standard deviation. If you cannot, explain why. In a survey of U.S. adults,...
-
Out of 2000 randomly selected people, about how many would you expect to have IQ scores less than 90 ? In a standardized IQ test, scores are normally distributed, with a mean score of 100 and a...
-
What is the highest score that would still place a person in the bottom \(10 \%\) of the scores? In a standardized IQ test, scores are normally distributed, with a mean score of 100 and a...
Study smarter with the SolutionInn App