3. A toy manufacturer makes stuffed kittens and puppies which have relatively lifelike motions. There are threedifferent mechanisms that can be installed in these "pets." These toys will sell for the same price regardless ofthe mechanism installed, but each mechanism has its own variable cost and setup cost. Profit, therefore, isdependent upon the choice of mechanism and upon the level of demand. The manufacturer has in hand aforecast of demand that suggests a 0.2 probability of light demand, a 0.45 probability of moderate demand,and a probability of 0.35 of heavy demand. Payoffs for each mechanism-demand combination appear in thetable below.Wind-up actionPneumatic actionElectronic actionDemandLightModerate$250,000$90,000-$100,000400,000440,000400,000Heavy650,000740,000780,000Construct the appropriate decision tree to analyze this problem. Use standard symbols for the tree.Analyze the tree to select the optimal decision for the manufacturer.

In the question, we could see that there are three alternatives, these are wind-up action, Pneumatic…

Answered: 3. A toy manufacturer makes stuffed…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Misu Sheet, owner of the Bedspread Shop, knows his customers will pay no more than $120 for a comforter. Misu wants a 30% markup on selling price. What is the most that Misu can pay for a comforter? Assume Misu Sheet wants a 30% markup on cost instead of on selling price. What is Misu's cost? Round to the nearest cent.
Sandeep purchased a water filter from an authorized distributor of one of the known water filter manufacturers. He was demonstrated the filter and its services by the sales manager at his home. But the sales manager never shared that the filters, which are in 5 numbers in the machine needs to be replaced every year. The cost of replacement is around ¼ the current price of the new machine. Sandeep want to file a case against thecompany, under which category this can be filed:a. Caveat Emptorb. Unfair Trade Practice
Using method 1 (combined depreciation and investment cost) determine the probable cost per hour of owning and operating a caterpillar that uses rubber tires.The equipment is a 185-hp diesel engine and the following conditions apply. Factor delivered price = $ 472,550Sales tax = 6.5% of delivered priceUnloading and assembling = $2,175Salvage value = $ 115,000Useful life = $ 6 yr.Hours used per year = 1,675 hrInterest on investment = 9.5%Maintenance and repair = 65% of straight line depreciationDiesel engine = 185 hpOperating factor = 0.60Fuel cost = $5.45/galCrankcase capacity = 9 galHours between oil changes = 135 hr.Oil cost = $14.25/galTires = $ 62,500Tire life = 4950 hr.Tire repairs = 12% of tire depreciation.
1. At a local Bed and Bath Superstore, the manager knows her customers will pay no more than $390 for a bedspread. The company wants a 40% markup on selling price. What is the most that the company can pay for a bedspread to realize the required markup?
a manufacturer produces a crib at a cost of $120 and adds a markup of 65% of the cost to determine the net price at which the crib will be sold. If he wishes to allow a 20% trade discount for his best customers, what list price should he set for the crib?
The Company has the oppotunity to introduce a new product. The sales manager believes that the firm could sell 5,000 units per year at 14 per unit for 5 years. The production manager has determined that machinery costing 60,000 and having a 5 year life and no salvage value could be required. The machinery will have an annual fixed cash operating costs of 4,000. Variable cost per unit will be 8. Straight-line depreciation is to be used for both book and tax purposes. The tax rate is 40% and the firm's cost of capital is 14%. What is the Net Present Value of the Investment?
2. Describe the concept of a product's VTC. Why is the monetary estimation of this value important for price setting?
b) In the first price sealed bid auction, a player gets a positive payoff by doing bid shadingExplain the tradeoff between biding lower than the value of the object and biding very close to value of the object.
4. Solar Hydro manufactures a revolutionary aeration system that combines coarse and fine bubble aeration components. This year (year 1) the cost for check valve components is $9,000. Based on closure of a new contract with a distributor in China and volume discounts, the company expects this cost to decrease. If the cost in year 2 and each year thereafter decreases by $560, what is the equivalent annual cost for a 5-year period at an interést rate of 10% per year?
Jessica's house sells for $235,000 and she pays a 6% real estate commission to the listing broker, Oscar. Oscar keeps 55% and gives the co-operating broker the balance of the sales commission. If Harry, the listing broker's agent, earns 65% of the commission that his broker receives, how much commission does Harry earn? O $5.689.25 (Dollars) O $4,124.25 (Dollars) O $5.040.75 (Dollars) O $9,165.00 (Dollars)
4. Astore is currently offering a 60% discount on all items purchased. Your cashier is trying to convince you to open a store credit card and says to you, "In addition to the 60% discount you are receiving for purchasing these items on sale today, you will get an additional 20% off for opening a credit card account. That means you are getting 105% off!" %3D a. What is the mistaken assumption here? b. Why is that assumption incorrect? c. If you did truly have 80% discount, explain what should happen when you go to the counter to buy $500 worth of items? show calculation d. If you got your 60% discount and opened up the card for an additional 20%, what is the actual % discount you would receive? show calculation e. Is it better to apply the 60% discount first or the 20% discount first?_show calculation
A business that will open a gift shop in Los Angeles is considering making and selling love-themed magnets. It is thought that it will not be possible to order new magnets during the fair period, and magnets that are not sold during the fair period will not be sold later. A box of magnets costs the business $100 and generates $460 from its sale. The table includes predictions about demand probabilities.1) What is the understocking cost?

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