# Question

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 .20, .50, and .30, 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.

a. Compute the expected value for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of maximizing the expected profit?

b. Compute the variance for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk oruncertainty?

a. Compute the expected value for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of maximizing the expected profit?

b. Compute the variance for the profit associated with the two expansion alternatives. Which decision is preferred for the objective of minimizing the risk oruncertainty?

## Answer to relevant Questions

For its “Music 360” survey, Nielsen Co. asked teenagers and adults how each group has listened to music in the past 12 months. Nearly two-thirds of U.S. teenagers under the age of 18 say they use Google Inc.’s ...A study conducted by the Pew Research Center showed that 75% of 18–to 34-year-olds living with their parents say they contribute to household expenses (The Wall Street Journal, October 22, 2012). Suppose that a random ...Blackjack, or twenty-one as it is frequently called, is a popular gambling game played in Las Vegas casinos. A player is dealt two cards. Face cards (jacks, queens, and kings) and tens have a point value of 10. Aces have a ...Many companies use a quality control technique called acceptance sampling to monitor incoming shipments of parts, raw materials, and so on. In the electronics industry, component parts are commonly shipped from suppliers in ...Given that z is a standard normal random variable, compute the following probabilities.a. P(z ≤ –1.0)b. P(z ≥ –1)c. P(z ≥ –1.5)d. P(–2.5 ≤ z)e. P(– 3 < z ≤ 0)Post your question

0