Question: you will get downvote for copy and paste some BS answers. Complete Exercise 6.5. (The Reliable phones problem reproduced below.) You can submit your work
you will get downvote for copy and paste some BS answers.
Complete Exercise 6.5. (The Reliable phones problem reproduced below.) You can submit your work as an Excel file and type your responses there. (10 Points) Reliable is a cell phone manufacturer serving the Asian and North American markets. Current annual demand for its product in Asia is 2 million, whereas the demand in North America is 4 million. Over the next two years, demand in Asia is expected to go up either by 50%, with a probability of 0.7 or by 20% with a probability of 0.3. Over the same period, demand in North America is expected to go up by 10% with a probability of 0.5 or go down 10% with a probability of 0.5. Reliable currently has a production facility in Asia with a capacity of 2.4 million units per year and a facility in North America with a capacity of 4.2 million per year. The variable production cost per phone in Asia is $15, and the variable production cost per phone in North America is $17. It costs $3 to ship a phone between the two markets. Each phone sells for $40 in both markets. Reliable is debating whether to add 2 million units or 1.5 million units of capacity to the Asia plant. The larger plant increase will cost $18 million, whereas the smaller addition will cost $15 million. Assume that Reliable uses a discount factor of 10%. What do you recommend?
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