P471-05
| Acme single-stage new product decision |
| Decision 1: Continue development and market the new product |
| Fixed cost | $6,000 |
| Unit margin | $18 |
| Market | Probability | Sales volume | Net revenue |
| Great | 0.45 | 600 | $10,800 |
| Fair | 0.35 | 300 | $5,400 |
| Awful | 0.20 | 90 | $1,620 |
| EMV | $1,074 |
| Decision 2: Stop development and abandon product |
| No payoffs, no costs, no uncertainty |
| EMV | $0 |
| 1. Sensitivity to probability in cell B8 (Use one-way data table) |
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| 2. Explain the data table results. |
All monetary values (except the unit margin in cell B5) are in $1000s, and all sales volumes are in 1000s of units.
P502-39
| Automobile inspections |
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| Given Probabilities: | Probability |
| P(inspected car has problems) |
| P(inspected car has no problems) |
| P(no problem found | inspected car has problems) |
| P(problem found | inspected car has problems) |
| P(no problem found | inspected car has no problems) |
| P(problem found | inspected car has no problems) |
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| 1. The goal is to find P(inspected car has problems | no problem was found). |
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| P(inspected car has problems | no problem was found) = | | |
| P(inspected car has problems AND no problem found)/P(no problem found) = |
| P(no problem found | inspected car has problems)*P(inspected car has problems)/ |
| (P(no problem found | inspected car has problems)*P(inspected car has problems) + |
| P(no problem found | inspected car has no problems)*P(inspected car has no problems)) |
| which is equal to …(results) |
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| 2. Provide a brief clarification discussion about your results. |
