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Dawson Electronics is a manufacturer of high-tech control modules for lawn sprinkler systems. Denise, the CEO, is trying to decide if the company should develop one of the two potential new products, the Water Saver 1000 or the Greener Grass 5000. With each product, Dawson can capture a bigger market share if it chooses to expand capacity by buying additional machines. Given different demand scenarios, their probabilities of occurrence, and capacity expansion versus no change in capacity, the potential sale of each product are summarized in the included table. Click the icon to view the table. What is the expected payoff for the Water Saver 1000 and the Greener Grass 5000, with and without capacity expansion? The expected payoff for the Water Saver 1000 with the capacity expansion is $ (Enter your response as an integer.) The expected payoff for the Water Saver 1000 without the capacity expansion is $ (Enter your response as an integer.) The expected payoff for the Greener Grass 5000 with the capacity expansion is $. (Enter your response as an integer.) The expected payoff for the Greener Grass 5000 without the capacity expansion is $ (Enter your response as an integer.) b. Which product should Denise choose to produce, and with which capacity expansion option? Denise should choose to produce the expand capacity. ▼and she buy additional machines to

Dawson Electronics is a manufacturer of high-tech control modules for lawn sprinkler systems. Denise, the CEO, is trying to decide if the company should develop one of the two potential new products, the Water Saver 1000 or the Greener Grass 5000. With each product, Dawson can capture a bigger market share if it chooses to expand capacity by buying additional machines. Given different demand scenarios, their probabilities of occurrence, and capacity expansion versus no change in capacity, the potential sale of each product are summarized in the included table. Click the icon to view the table. What is the expected payoff for the Water Saver 1000 and the Greener Grass 5000, with and without capacity expansion? The expected payoff for the Water Saver 1000 with the capacity expansion is $ (Enter your response as an integer.) The expected payoff for the Water Saver 1000 without the capacity expansion is $ (Enter your response as an integer.) The expected payoff for the Greener Grass 5000 with the capacity expansion is $. (Enter your response as an integer.) The expected payoff for the Greener Grass 5000 without the capacity expansion is $ (Enter your response as an integer.) b. Which product should Denise choose to produce, and with which capacity expansion option? Denise should choose to produce the expand capacity. ▼and she buy additional machines to

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter5: Network Models
Section5.3: Assignment Models
Problem 12P
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Dawson Electronics is a manufacturer of high-tech control modules for lawn sprinkler systems. Denise, the CEO, is trying to decide if the company should develop one of the two potential new products, the Water Saver 1000 or the Greener Grass 5000. With each product, Dawson can capture a bigger market share if it chooses to expand capacity by buying additional machines. Given different demand scenarios, their probabilities of occurrence, and capacity expansion versus no change in capacity, the potential sale of each product are summarized in the included table. Click the icon to view the table. What is the expected payoff for the Water Saver 1000 and the Greener Grass 5000, with and without capacity expansion? The expected payoff for the Water Saver 1000 with the capacity expansion is $ integer.) The expected payoff for the Water Saver 1000 without the capacity expansion is $. (Enter your response as an integer.) ਗਿਆ (Enter your response as an The expected payoff for the Greener Grass 5000 with the capacity expansion is $ (Enter your response as an integer.) Denise should choose to produce the expand capacity. The expected payoff for the Greener Grass 5000 without the capacity expansion is S integer.) b. Which product should Denise choose to produce, and with which capacity expansion option? and she Enter your response as an buy additional machines to
Transcribed Image Text:Dawson Electronics is a manufacturer of high-tech control modules for lawn sprinkler systems. Denise, the CEO, is trying to decide if the company should develop one of the two potential new products, the Water Saver 1000 or the Greener Grass 5000. With each product, Dawson can capture a bigger market share if it chooses to expand capacity by buying additional machines. Given different demand scenarios, their probabilities of occurrence, and capacity expansion versus no change in capacity, the potential sale of each product are summarized in the included table. Click the icon to view the table. What is the expected payoff for the Water Saver 1000 and the Greener Grass 5000, with and without capacity expansion? The expected payoff for the Water Saver 1000 with the capacity expansion is $ integer.) The expected payoff for the Water Saver 1000 without the capacity expansion is $. (Enter your response as an integer.) ਗਿਆ (Enter your response as an The expected payoff for the Greener Grass 5000 with the capacity expansion is $ (Enter your response as an integer.) Denise should choose to produce the expand capacity. The expected payoff for the Greener Grass 5000 without the capacity expansion is S integer.) b. Which product should Denise choose to produce, and with which capacity expansion option? and she Enter your response as an buy additional machines to
Data Table Low Demand Medium Demand High Demand Low Demand Medium Demand High Demand Demand and Sales Information for Dawson Electronics Water Saver 1000 Greener Grass 5000 Dollar Sales ($1,000) Dollar Sales ($1,000) With Capacity Expansion 1,600 3.200 4.100 Without Capacity Expansion 800 1,000 2,000 2.200 3.500 4.900 1.000 2.200 2.800 Probability of Occurrence 0.25 0.50 0.25 0.25 0.50 almal l dl maltri in - X SOC ras
Transcribed Image Text:Data Table Low Demand Medium Demand High Demand Low Demand Medium Demand High Demand Demand and Sales Information for Dawson Electronics Water Saver 1000 Greener Grass 5000 Dollar Sales ($1,000) Dollar Sales ($1,000) With Capacity Expansion 1,600 3.200 4.100 Without Capacity Expansion 800 1,000 2,000 2.200 3.500 4.900 1.000 2.200 2.800 Probability of Occurrence 0.25 0.50 0.25 0.25 0.50 almal l dl maltri in - X SOC ras
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Formulae used: 

The expected payoff= (Low demand dollar sales × probability) + (Medium demand dollar sales × probability) + (High demand dollar sales ×probability)

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