Boney Corporation Processes Sugar Beets That It Purchases from Farmers

question 51

Multiple Choice

Boney Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $53 to buy from farmers and $18 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $25 or processed further for $18 to make the end product industrial fiber that is sold for $39. The beet juice can be sold as is for $32 or processed further for $28 to make the end product refined sugar that is sold for $79.
-What is the financial advantage (disadvantage) for the company from processing the intermediate product beet juice into refined sugar rather than selling it as is?

• A) $1 per batch
• B) ($17) per batch
• C) $19 per batch
• D) ($52) per batch

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Definitions:

Poisson Distribution

A statistical distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space.

Unloading Rates

The speed at which goods are removed from a container, ship, or other transport vehicle.

Cumulative Probability

represents the likelihood of a random variable falling within a specified range, calculated as the sum of probabilities up to a certain point.

Monte Carlo Method

A simulation technique that uses random elements when chance exists in their behaviour.