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

question 35

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 70% of the production lines and
Design B for the remaining production lines, what is the expected profit?

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Definitions:

Instrument

A formal legal document that grants rights, imposes duties, or records a transaction, such as a contract, will, or deed.

Variable Interest

An interest rate that can fluctuate over time, often based on a standard financial index, in contrast to a fixed interest rate.

Revised Article 3

Refers to the updated section of the Uniform Commercial Code (UCC) that governs negotiable instruments, including the processes for issuing, transferring, and enforcing such documents.

Negotiable

Capable of being transferred or endorsed from one party to another in accordance with the law, generally referring to legal documents like checks.