A B C D E F G 1 Wakeboard Model 2 Description: Based on cost parameters, production quantity, and demand, compute revenues, costs, and profit. 3 4 Cost Parameters Probability Distribution of Demand 5 Fixed Production Cost Probability Demand 6 Variable Production Cost/Unit 7 Selling Price/Unit 8 Salvage Value/Unit 9 10 Production and Demand Quantities 11 Production Quantity (decision) 12 Demand (unknown when production quantity decided) Expected Value of Demand (calculated) 13 14 Calculation of Regular and Salvage Sales Quantities 15 Regular Sales Quantity 16 Salvage Sales Quantity 17 18 Calculation of Revenues, Costs, and Profit 19 Revenue: Regular Sales 20 Revenue: Salvage Sales 21 Revenue: Total 22 23 Cost: Fixed 24 Cost: Total Variable 25 Cost: Total 26 27 Profit