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nova97
nova97
04.03.2021 • 
Business

Super-Chem, Inc. normally produces a perishable chemical product at a cost of $16 per pound. The product sells for $28 per pound and has no salvage value if not sold. For production planning purposes, the company is considered possible demands of 100 or 200 pounds. If the demand is greater than the amount available, the company will satisfy the excess demand with a special production run at a cost of $35 per pound. In other words, the company policy is to satisfy all demand by using more expensive special production runs, if necessary. The product, however, always sells for $28 per pound. The production manager estimates that the probabilities that demands equal to 100 pounds and 200 pounds are 0.7 and 0.3, respectively. Let A1= Produce 100 pounds A2 = Produce 200 pounds D1 = Demand is 100 pounds D2 = Demand is 200 pounds
Based on these information, in the payoff (profit) table for this decision problem, the profit (in $) for the A2-D1 combination is D .O. A
A. +2,800
B. +3,200
C. -4000 5 0 . 00
D. Not enough information given to answer this question
E. None of the above

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