SCENARIO 5-12
Two Different Designs on a New Line of Winter

question 223

Short Answer

SCENARIO 5-12
Two different designs on a new line of winter jackets for the coming winter are available for your
manufacturing plants. Your profit (in thousands of dollars) will depend on the taste of the consumers
when winter arrives. The probability of the three possible different tastes of the consumers and the
corresponding profits are presented in the following table. $$\begin{array} { | c | c | r | r | } \hline \text { Probability } & \text { Taste } & \text { Design A } & \text { Design B } \\\hline 0.2 & \text { more conservative } & 180 & 520 \\\hline 0.5 & \text { no change } & 230 & 310 \\\hline 0.3 & \text { more liberal } & 350 & 270 \\\hline\end{array}$$
-Referring to Scenario 5-12, if you decide to choose Design A for half of the production lines and
Design B for the other half, what is the risk of your investment?

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Definitions:

Foam Mattress

A type of mattress filled with foam that adjusts to the weight and shape of the body to provide support and comfort.

Air-suspension Bed

A type of hospital bed that uses air-filled sacs to distribute patient weight, reducing pressure points and aiding in prevention of bedsores.

Respiratory Insufficiency

A condition where the respiratory system fails to meet the body's oxygen demand or to eliminate sufficient carbon dioxide.

Osteoporosis

A medical condition characterized by weakened bones, making them fragile and more likely to break.