Question: You are tasked with selecting a solar array for the next generation of communication satellites that your company is developing. You have three options: Material
You are tasked with selecting a solar array for the next generation of communication satellites
that your company is developing. You have three options: Material A Material B and Material
C Your engineering team really likes Material A because it achieves a efficiency in
converting sunlight to electrical power. They prefer to not use Material C because it is
considered dated in the solar power community. Material B seems a good compromise between
the two, with a efficiency.
The sales department estimates that the efficiency can lead to sales between $ and
$with : odds Material B can perform decently in the market, leading to sales
between $ and $with : odds Material C may still generate revenue in the
order of $ They are confidence about this, since a competitor may also launch a
better product, in which case sales with Material would be $
The cost to develop solar arrays with Material A is estimated at somewhat between $
with confidence and $with confidence The cost to develop solar arrays
with Material B is estimated at $ with a risk of overrunning to $ The cost to
develop solar arrays with Material C is estimated at $ which includes $ of raw material
that you already have in stock and cannot be resold.
Material A is a new development and, after talking to the subject matter experts, you realize
that there is a chance the development is too late to meet the time to market, which
would reduce your sales by However, if the development is late, you can quickly react
and manufacture the solar arrays with Material to meet the time to market without any cost
impact, given that you already have all the material in stock.
With the objective of maximizing profit, choose what material to use for developing and
manufacturing the solar arrays.
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