Each rented car makes a $100 profit per day and each unrented car makes a loss of $30per day. It is known that 11, 12, and 13 cars will be demanded with the probabilities 0.4,0.5, and 0.1 correspondingly. How many cars a firm should have to get the maximumprofit?

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Answered: Each rented car makes a $100 profit per…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.
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State the difference between the simulated average demand and expected average demand in simulation ?

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Each rented car makes a $100 profit per day and each unrented car makes a loss of $30 per day. It is known that 11, 12, and 13 cars will be demanded with the probabilities 0.4, 0.5, and 0.1 correspondingly. How many cars a firm should have to get the maximum profit?