Question: Tesla is producing four models in its facilities in cities around the world: Model 3 , Model S , Model X , and Model Y

Tesla is producing four models in its facilities in cities around the world: Model 3, Model S, Model X, and Model Y. It is estimated that demand for each car model in 2025 will be 400,000,500,000 or 600,000 units; with probabilities 0.4,0.2, and 0.4, respectively. The company is focusing on 4 assembly plants in this problem: Fremont (Model 3), Austin (Model S), Gru nheide (Model X), and Shanghai (Model Y) each dedicated to one particular model.
a) The company decides to establish 500,000 units of capacity in each plant prior to 2025 and has no chance to change that within the year. What is the expected total sales for Tesla in 2025?b) If the company can adopt a complete flexibility configuration and still establishes 500,000 units of capacity in each assembly line prior to 2025, what is the expected total sales for Tesla in 2025?
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c) It turns out that a complete flexibility configuration can be very costly. Tesla is interested in a limited flexibility configuration such that each model can be produced in one other line. Tesla decided to invest in plants such that Fremont can also produce Model S, Austin can also produce Model 3, Gru nheide can also produce Model Y, Shanghai can also produce Model X. What is the expected total sales for Tesla in 2025, if it uses this configuration? (Assume again that the capacity of each plant is 500,000).
d) Recommend a better limited flexibility configuration to Tesla. Construct a demand scenario in which the total demand is partially satisfied in the previous configuration in part c) but fully satisfied in the configuration you suggested.

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