1. A producer owns a herd of 200 Angora goats which are sheared yearly and their...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. A producer owns a herd of 200 Angora goats which are sheared yearly and their fleeces are sold into the mohair industry. They are looking to purchase an additional 150 or 300 goats to potentially market more fleece (goats will be shorn one year from today). Their goal is to maximize profit. In the following problem, the producer is trying to decide on three alternatives: - Keep herd size the same; Increase the herd size by 150 goats Increase the herd size by 300 goats, which would require a one-time cost of $10,000 to build a new barn There has been considerable fluctuations currently occurring in market price due to trade negotiations with foreign buyers. The producer feels that next year's price could fluctuate either plus or minus $2.45/lb from the present price or it could stay the same. In order to calculate the various profit expectations use the following: Current mohair market price Total cost per goat Expected fleece wt to sell $6.75/lb $95/head/year 15 lbs/head You should complete the following: 1. Construct a payoff matrix to show the possible gross profits under the various alternatives. 2. What would the decision be under the least regret rule? 3. Calculate the EMV's assuming the following probabilities: a. Decrease in price - .30 b. No change in price - .20 c. Increase in price - .50 1. A producer owns a herd of 200 Angora goats which are sheared yearly and their fleeces are sold into the mohair industry. They are looking to purchase an additional 150 or 300 goats to potentially market more fleece (goats will be shorn one year from today). Their goal is to maximize profit. In the following problem, the producer is trying to decide on three alternatives: - Keep herd size the same; Increase the herd size by 150 goats Increase the herd size by 300 goats, which would require a one-time cost of $10,000 to build a new barn There has been considerable fluctuations currently occurring in market price due to trade negotiations with foreign buyers. The producer feels that next year's price could fluctuate either plus or minus $2.45/lb from the present price or it could stay the same. In order to calculate the various profit expectations use the following: Current mohair market price Total cost per goat Expected fleece wt to sell $6.75/lb $95/head/year 15 lbs/head You should complete the following: 1. Construct a payoff matrix to show the possible gross profits under the various alternatives. 2. What would the decision be under the least regret rule? 3. Calculate the EMV's assuming the following probabilities: a. Decrease in price - .30 b. No change in price - .20 c. Increase in price - .50
Expert Answer:
Answer rating: 100% (QA)
No increase Increase by 150 Increase by 300 Market price stays same 19125 31125 43125 Market price i... View the full answer
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date:
Students also viewed these accounting questions
-
There has been considerable engineering effort directed at finding ways to perform manipulative operations in space-for example, assembling a space station and acquiring target satellites. To perform...
-
There has been considerable momentum to reduce or remove trade barriers in an effort to achieve free trade. Yet, one disgruntled executive of an exporting firm stated, Free trade is not conceivable;...
-
There has been considerable growth in recent years in the use of economic analysis in investment management. Further significant expansion may lie ahead as financial analysts develop greater skills...
-
In Exercises 118, find the distance between each pair of points. If necessary, express answers in simplified radical form and then round to two decimals places. (2.6, 1.3) and (1.6, -5.7)
-
Krug International, an Ohio corporation, had a contract with Iraqi Airways to build aeromedical equipment for training pilots. Krug then contracted for Power Engineering, an Iowa corporation, to...
-
Right-circular light passes through a λ/4 retarder whose fast axis is vertical. Describe the emerging polarization state. Did the polarization state shift one quarter of the way around...
-
The price of a share is \(\$ 40\). If \(\mu=0.1\) and \(\sigma^{2}=0.16\) per year, find a \(95 \%\) confidence interval for the price of the share after six months (i.e. an interval...
-
Fifty-six percent of men do not look forward to going clothes shopping for themselves. You randomly select eight men. Find the probability that the number of men who do not look forward to going...
-
On January 1 , 2 0 2 1 , Frontier World issues $ 3 9 . 1 million of 9 % bonds, due in 2 0 years, with interest payable semiannually on June 3 0 and December 3 1 each year. The proceeds will be used...
-
The following selected accounts appear on the Balance Sheet of Examination Corporation as of December 31, 2021. Stockholders' Equity Preferred 5% Stock, $100 par (100,000 shares authorized, 25,000...
-
Determine the increase in length of a steel bar whose length is 100 in, if the bar is heated from room temperature of 70F to 500F. Assume coefficient of thermal expansion = 6.710-6/F for steel.
-
What methodologies and approaches can be employed to mitigate interpersonal conflicts and enhance interpersonal cohesion within teams, thereby fortifying resilience and bolstering performance amidst...
-
what ways can synergistic team dynamics be cultivated within organizational frameworks to augment operational efficacy and foster a culture of collaborative excellence? Explain
-
In what ways, if any, does U.S. society appear to be sophistic in orientation? Your task is to respond to this question in two paragraphs. To answer this question, you should consider defining...
-
How many times have you heard the phrase"our people are our most important asset"? What does it mean, and do you agree with it? Why or why not?
-
What measures can leaders implement to mitigate the potential pitfalls of over-delegation or micromanagement, striking a delicate balance between empowerment and control to avoid burnout,...
-
find the area of the base and the surface area? 4. 8 ft 12.1 ft 5 ft 19 ft 14 ft
-
For the following exercises, find the area of the triangle. Round to the nearest hundredth. 22 50 36
-
Civil Code 1719, subdivision (a) provides in part that any person who draws a check that is dishonored due to insufficient funds shall be liable to the payee for the amount owing upon the check and...
-
Distinguish between a shipment contract and a destination contract. When does title and risk of loss pass under each?
-
Joe Brown gave to his wife, Mary Brown, $350,000 with which to buy real property. They orally agreed that title to the real property should be taken in the name of Mary Brown but that she should hold...
-
Universities are interested in increasing donations from their alumni. Donations from former students help fund important building projects, upgrade existing facilities, support student...
-
Figure P16.36 shows the two lowest resonances recorded in the vocal tract of the eastern towhee, a small songbird. a. Is this birds vocal tract better modeled as an open-open tube or an open-closed...
-
Two loudspeakers, 1.0 m apart, emit sound waves with the same frequency along the positive x-axis. Victor, standing on the axis to the right of the speakers, hears no sound. As the frequency is...
Study smarter with the SolutionInn App