Question: 2 . 2 7 A foundry has received an order for 2 0 custom - designed castings. The casting process costs 5 0 0 per

2.27 A foundry has received an order for 20 custom-designed castings. The casting process costs
500 per unit. If a casting is not sold, it has a recycle value of
2000 per casting for 20 acceptable castings; the customer has also agreed to pay $1500 each for one or two additional castings. However, the customer is unwilling to purchase fewer than 20 or more than 22 castings. Based on historical records, the following probability distributions have been estimated. How many castings should be scheduled for production to maximize expected profit? What is the probability of losing money? 2024 # Good Castings 1213141516171819202122230.100.100.100.100.100.100.200.100.100.000.000.000.000.000.000.000.000.000.00210.050.100.100.100.100.100.100.150.100.100.000.000.000.000.000.000.000.000.00220.000.050.100.100.100.100.100.100.150.100.100.000.000.000.000.000.000.000.00 Number of Castings Scheduled 232526270.000.000.000.000.000.050.050.050.000.000.050.050.050.050.000.100.050.050.050.000.100.050.050.050.050.100.100.050.050.050.100.100.050.050.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.100.000.100.100.100.100.000.000.100.100.100.000.000.000.050.050.000.000.000.000.050.000.000.000.000.000.000.000.000.000.000.000.000.000.000.00280.000.000.000.000.000.050.050.100.100.100.100.100.100.100.100.050.050.000.00290.000.000.000.000.000.000.050.050.100.100.100.100.100.100.100.100.050.050.00300.000.000.000.000.000.000.050.050.050.100.100.100.100.100.100.100.050.050.0524. WNNNNNN 252627282930

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!