The Operations Manager for a Well-Drilling Company Must Recommend Whether

question 51

Multiple Choice

The operations manager for a well-drilling company must recommend whether to build a new facility,expand his existing one,or do nothing.He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: If he feels the chances of low,normal,and high precipitation are 30%,20%,and 50%,respectively,what are expected long-run profits for the alternative he will select?

• A)$140,000
• B)$170,000
• C)$285,000
• D)$305,000
• E)$475,000

---

Definitions:

Component Parts

Individual pieces or materials that are assembled or used together to create a finished product or to complete a larger assembly.