Question: A foundry has received an order for 2 0 custom - designed castings. The casting process costs $ 7 0 0 per unit scheduled. If
A foundry has received an order for customdesigned castings. The casting
process costs $ per unit scheduled. If a casting is good, then it is machined to
specifications at an added cost of $ per unit. If a casting is not sold, it has a
recycle value of $ The customer has indicated a willingness to pay $ per
casting for acceptable castings; the customer has also agreed to pay $ each
for one or two additional castings. However, the customer is unwilling to purchase
fewer than or more than castings. Based on historical records, the following
probability distributions have been estimated. How many castings should be
scheduled for production to maximize expected profit? Tabulate your calculations
into tables for parts to Answers:
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