Overall Expected Profit: Start Net Profit Plants Capacity Configuratio Plant Products 1 2 Products 1 2...

Transcribed Image Text:

Overall Expected Profit: Start Net Profit Plants Capacity Configuratio Plant Products 1 2 Products 1 2 Demand Demand A 7 10 A 1000 A: 1000; Probability: 0.25 B: 1000 B 6 4 B 1000 Profit: Capacity 2000 2000 Demand A: 1000 Demand A: 1000; Probability: 0.25 B: 3000 Net Profit Plants Capacity Configuratio Products 1 2 Products Plant 1 2 Demand A 7 10 A B 6 4 B 1000 3000 Profit: Capacity 2000 2000 Net Profit Plants Capacity Configuratio Plant Demand Products 1 2 Products 1 2 Demand A: 3000; Probability: 0.25 A 7 10 A B: 1000 B 6 4 B 3000 1000 Demand A: 3000 Profit: Capacity 2000 2000 Demand Net Profit Plants Capacity Configuratio A: 3000; Probability: 0.25 B: 3000 Products 1 2 Products Plant 1 2 Demand A 7 10 A 3000 B 6 4 B 3000 Profit: Capacity 2000 2000 Hint: 1. The Optima Corporation owns two plants, each with a capacity to produce 2,000 units of either product A or B. The net profit per unit to produce and ship each of these products from these plants is shown in Table 2.3. Demand for each of these products can take values of 1,000 or 3,000 with equal probability. TABLE 2.3 Net profits Step 1: Under each demand scenario, try to figure out how much to produce for products A and B in Plants 1 and 2 in the gray area. The production plan you propose should maximize the profit under this demand scenario. Step 2: Calculate the corresponding profit given the production plan you proposed in the light blue area. Step 3: Calculate the overall expected profit that summarizing all the demand senarios. Report it in the light green area. Step 4: Answer the following questions in the textbox. PLANTS PRODUCTS 2 A 7 10 B 6 4 What is the expected profit associated with the current capacity configuration? Can you justify why the capacity at these plants is sometimes larger than the demand? Question: Why the capacity at these plants is sometimes larger than the demand? Your answer: Overall Expected Profit: Start Net Profit Plants Capacity Configuratio Plant Products 1 2 Products 1 2 Demand Demand A 7 10 A 1000 A: 1000; Probability: 0.25 B: 1000 B 6 4 B 1000 Profit: Capacity 2000 2000 Demand A: 1000 Demand A: 1000; Probability: 0.25 B: 3000 Net Profit Plants Capacity Configuratio Products 1 2 Products Plant 1 2 Demand A 7 10 A B 6 4 B 1000 3000 Profit: Capacity 2000 2000 Net Profit Plants Capacity Configuratio Plant Demand Products 1 2 Products 1 2 Demand A: 3000; Probability: 0.25 A 7 10 A B: 1000 B 6 4 B 3000 1000 Demand A: 3000 Profit: Capacity 2000 2000 Demand Net Profit Plants Capacity Configuratio A: 3000; Probability: 0.25 B: 3000 Products 1 2 Products Plant 1 2 Demand A 7 10 A 3000 B 6 4 B 3000 Profit: Capacity 2000 2000 Hint: 1. The Optima Corporation owns two plants, each with a capacity to produce 2,000 units of either product A or B. The net profit per unit to produce and ship each of these products from these plants is shown in Table 2.3. Demand for each of these products can take values of 1,000 or 3,000 with equal probability. TABLE 2.3 Net profits Step 1: Under each demand scenario, try to figure out how much to produce for products A and B in Plants 1 and 2 in the gray area. The production plan you propose should maximize the profit under this demand scenario. Step 2: Calculate the corresponding profit given the production plan you proposed in the light blue area. Step 3: Calculate the overall expected profit that summarizing all the demand senarios. Report it in the light green area. Step 4: Answer the following questions in the textbox. PLANTS PRODUCTS 2 A 7 10 B 6 4 What is the expected profit associated with the current capacity configuration? Can you justify why the capacity at these plants is sometimes larger than the demand? Question: Why the capacity at these plants is sometimes larger than the demand? Your answer: