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

question 69

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 30% of the production lines and
Design B for the remaining production lines, what is the expected profit?

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Definitions:

Decreasing Rate

Decreasing Rate refers to a situation where the rate of growth or rate of increase in a variable is slowing down over time.

M2

A measurement of the total amount of money available that encompasses physical currency, funds in checking accounts, and near-cash assets like savings accounts and money market funds.

Basic Money Supply

The total amount of liquid money available in the economy, including cash and easily accessible deposits.

M1

A category of the money supply that includes physical currency and coin, demand deposits, traveler's checks, and other liquid assets accessible for immediate spending.