Tyson Manufacturing (A Maker of Industrial Products)is Interested in Marketing

question 57

Essay

Tyson Manufacturing (a maker of industrial products)is interested in marketing a new product.The company must decide whether to manufacture this product essentially on its own or employ a subcontractor to manufacture it.Below are two tables that represent the information related to the estimated probability distribution of the cost of one unit of this product under each alternative.
Assuming that Tyson seeks to minimize the expected unit cost of manufacturing of buying the new product,should the company make the new product or buy it from a subcontractor? Show your work.

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Definitions:

Ease Of Warning

The simplicity with which potential risks or dangers can be communicated to the public or stakeholders.

Strict Product Liability

A legal doctrine that makes manufacturers, distributors, or retailers liable for damages caused by defective products, regardless of fault or negligence.

Reasonably Foreseeable

Refers to events or outcomes that can be predicted or expected by a person with regular intelligence and foresight.

Injured Party

A person or entity that has suffered harm or damage due to the actions or negligence of another, and may be entitled to compensation or remedy under the law.