Question: Problem 3 (Happy Electronics) Happy Electronics is developing a new product for which the unit profit margin (i.e. unit selling price minus unit cost) will

Problem 3 (Happy Electronics)

Happy Electronics is developing a new product for which the unit profit margin (i.e. unit selling price minus unit cost) will be $5. However, the development time ? is a random variable that follows an exponential distribution with a parameter ?=?, where ? is the total investment in this R&D project in million $. For example, if the total investment is $5 million, then ?= 5. The demand will be a function of the development or introduction time of this new product: the later the introduction, the smaller the demand. In particular, demand

The company is now comparing two investment plans: $2 million versus $5 million. To maximize the total profit, which plan is better? You can solve this problem by building a simulation model in Excel.

Problem 3 (Happy Electronics)Happy Electronics is developing a new product for which

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