NewModule6ProblemWorkbook.xlsx

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    P471-05

    Acme single-stage new product decision
    Decision 1: Continue development and market the new product
    Fixed cost $6,000
    Unit margin $18
    Market Probability Sales volume Net revenue
    Great 0.45 600 $10,800
    Fair 0.35 300 $5,400
    Awful 0.20 90 $1,620
    EMV $1,074
    Decision 2: Stop development and abandon product
    No payoffs, no costs, no uncertainty
    EMV $0
    1. Sensitivity to probability in cell B8 (Use one-way data table)
    2. Explain the data table results.

    All monetary values (except the unit margin in cell B5) are in $1000s, and all sales volumes are in 1000s of units.

    P502-39

    Automobile inspections
    Given Probabilities: Probability
    P(inspected car has problems)
    P(inspected car has no problems)
    P(no problem found | inspected car has problems)
    P(problem found | inspected car has problems)
    P(no problem found | inspected car has no problems)
    P(problem found | inspected car has no problems)
    1. The goal is to find P(inspected car has problems | no problem was found).
    P(inspected car has problems | no problem was found) =
    P(inspected car has problems AND no problem found)/P(no problem found) =
    P(no problem found | inspected car has problems)*P(inspected car has problems)/
    (P(no problem found | inspected car has problems)*P(inspected car has problems) +
    P(no problem found | inspected car has no problems)*P(inspected car has no problems))
    which is equal to …(results)
    2. Provide a brief clarification discussion about your results.

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