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When the objective is to maximized expected profits

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Problem 1: A yatch company has developed a new cabin cruiser which they earmarked for the medium to large board market. A market analysis has a 30% probability of annual sales being 5000 boats, and a 40% probability of 4000 annual sales. This company can go into limited production while available costs are sh.10,000 per boat and a fixed cost and sh.800,000 annually. Alternatively they can go into full production where variable cost are sh.9000 per boat and fixed costs are sh.5,000,000 annually, if the new boat is to be sold for shs.11,000 should the company go to limited or full scale production when the objective is to maximized expected profits

Reference no: EM132632670

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