What is the expected profit for the lot size obtained

Assignment Help Operation Management

Reference no: EM13228973

A foundry receives an order for specialty castings. Cost of producing each casting is estimated to be $15,000. The customer requires that exactly 4 good castings be supplied. The customer will pay $20,000 for each good casting. If fewer than four good castings are available, none will be purchased. Each casting is produced independently and the probability of an individual casting being acceptable to the customer is .80. 1/ Develop the expected profit function to be maximized? 2/ Determine the production lot size that maximizes expected profit? 3/ Determine the lot size that will yield a probability of .90 of producing at least 4 good castings. What is the expected profit for the lot size obtained?

Reference no: EM13228973

Questions Cloud

Why is forecasting important for an organization : Why is forecasting important for an organization? Which company do you believe to be successful at forecasting and why?

How must the selling price be changed : Is the situation a profitable one for the job shop? If not, how must the selling price be changed for the expected profit to be positive?

What factors started the decline in nuclear power industry : 3) What factors started the decline in the nuclear power industry, and what events essentially ended new construction of nuclear power plants 4) What are three advantages of using AC power over using DC power

Explain minimize changes in acidity by reacting : Blood contains several substances that minimize changes in its acidity by reacting with either an acid or a base. One of these is the hydrogen phosphate ion, HPO42-.

What is the expected profit for the lot size obtained : Determine the lot size that will yield a probability of .90 of producing at least 4 good castings. What is the expected profit for the lot size obtained?

Demonstrate a sound understanding of viewpoint : Demonstrate a sound understanding of the three viewpoints on corporate responsibility: the classical economic view (exemplified by Milton Friedman), the socio-economic view.

Determine the inter-atomic distance of neighbor copper atoms : A rod of ultrahigh purity copper is 1 cm in diameter and 10 cm long at room temperature. Its mass is found to be 70.18 g. Determine the inter-atomic distance between two nearest- neighbor copper atoms.

Describe three specific crimes in which digital forensics : In your response, be sure to list the type(s) of evidence that would most likely be collected in the crimes that you have described.

Explain what is the formula of the nonhydrated : Washing soda is often added to detergent formulations to make the wash water more basic. What is the formula of the NONHYDRATED form of washing soda? Does it increase or decreased the pH of the wash water?

User Account

All Pages