Kitchens to improve productivity and quality

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Reference no: EM132221767

McBurger, Inc., wants to redesign its kitchens to improve productivity and quality. Three? designs, called designs? K1, K2, and? K3, are under consideration. No matter which design is? used, daily production of sandwiches at a typical McBurger restaurant is for 550 sandwiches. A sandwich costs $1.50 to produce.? Non-defective sandwiches? sell, on the? average, for $2.75 per sandwich. Defective sandwiches cannot be sold and are scrapped.

The goal is to choose a design that maximizes the expected profit at a typical restaurant over a? 300-day period. Designs?K1, K2, and K3 cost $100,000?, $150,000?, and $180,000 respectively.

Under design? K1, there is a .80 chance that 90 out of each 100 sandwiches are? non-defective and a .20 chance that 70 out of each 100 sandwiches are? non-defective.

Under design? K2, there is a .85 chance that 90 out of each 100 sandwiches are? non-defective and a .15 chance that 75 out of each 100 sandwiches are? non-defective.

Under design? K3, there is a .90 chance that 95 out of each 100 sandwiches are? non-defective and a .10 chance that 80 out of each 100 sandwiches are? non-defective.

The expected profit level of design K1 is ?$ _____________. ?(Enter your response as a real number rounded to two decimal places.?)

Reference no: EM132221767

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