What is the expected profit you expect to generate

Assignment Help Operation Management

Reference no: EM13732779

Suppose you are in charge of determining the level of production for the new "Hot Shots Golf "
game of PlayStation. Based on past experience selling this type of games you know that:
? After 5 months a new version will be released.
? Total Demand during these 5 months is normally distributed with mean 40,000 units and standard deviation 10,000 units
? The manufacturing cost of a game is $15 per unit.
? The regular market price of the game is $40 per unit.
? Unsold units at the end of the 5 months can be liquidated on a secondary market for $10 per unit

1. How many units should you produce of this game knowing that the units produced need to last for the next 5 months with no possibility of replenishment during this period?
2. What is the expected profit you expect to generate?
3. The secondary market can only handle 2000 units. If more than 2000 units are unsold then they will need to discarded. Is this a problem? Explain.

Reference no: EM13732779

Questions Cloud

Principles of the crisis and emergency risk communication : Describe the principles of the Crisis and Emergency Risk Communication (CERC) Model. Relate the CERC principles to the stages of a crisis by discussing how the CERC principles can have an impact during the Chronic stage of a crisis

Based on the forecast and customer order information : 23. (Total 10 points) Based on the forecast and customer order information provided by the company that manufactures the external protection blocks used in the space shuttle, obtain the master production schedule (using the table below - a copy of th..

Write a paper on general mills : Write a white paper on a company of your choice (select one from: BMW, Ford, General Mills, Kraft foods, Nike, or Boeing) and discuss the market segmentation within that industry along with the target market for the company and the selection proce..

Visual presentation enhance effectiveness : In a 250-300 word response, describe a work report that you are required (or have been required) to complete on a regular basis. How would you present the information related to this report in a visual manner? Would a visual presentation enhance i..

What is the expected profit you expect to generate : 1. How many units should you produce of this game knowing that the units produced need to last for the next 5 months with no possibility of replenishment during this period? 2. What is the expected profit you expect to generate?

Determine the cost of debt and equity : Determine the cost of debt and equity for your chosen US publicly traded company using the techniques presented and Determine what, in your opinion, the optimal mix of debt and equity is for your company.

Describe monetary units and exchange rate : Market Information-This section should include the following subsections about management, marketing, and financial issues: Monetary units and exchange rate

Swearing in of a new us president in 2009 : Explore and discuss the major changes that have come to public employee unions since the swearing in of a new U.S. President in 2009.

Firm key building blocks : Discuss how you can use VCA, RBV, and SWOT analyses to gain a stronger sense of what might be a firm's key building blocks are for a successful strategy.

User Account

All Pages