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Mchrger, |nc., wants to redesign its kitchens to improve productivity and quality. Three designs, Called designs K1, K2, and K3. are under...
Just couldn't figure this whole problem out. don't forget to help me determine if k1-k3 which one achieves maximum profit.
18. Mchrger, |nc., wants to redesign its kitchens to improve productivity and quality. Three designs, Called designs K1, K2, and K3. are under consideration. No matter which design is used, daily pmduction of sandwiches at a typical McBurger restaurant is tor 600 sandwiches. A sandwichcosts $1.50 to produce. Non-defective sandwiches sell. on the average. for $3.10 per sandwich. Detective sandwiches cannot be sold and are scrapped. The goal is to choose a design that maximizes the expected profit at a typical restaurant over a 300-day period. Designs K1, K2, and K3 cost $115,000. $150,000. and $140,000. respectively. Under design K1, there is a .80 chance that 90 out or each 100 sandwiches are non-detective and a .20 chance that 70 out of each 100 sandwiches are non-detective. Under design K2, there is a .85 chance that 90 out of each 100 sandwiches are non-detective and a .15 chance that75 out of each 100 sandwiches are non-detective. Under design K3, there is a ,90 chance that 95 out of each 100 sandwiches are non—detective and a .10 chance that 80 out of each 100 sandwiches are non—defective. The expected profit level of design K1 is S . (Enter your response as a real number rounded to M0 decimal places.)The expected profit level of design K2 is $ . (Enter your response as a real number rounded to two decimal places)The expected profit level of design K3 is S . (Enter your response as a real number rounded to two decimal places.) What is the expected profit level of the design that achieves the maximum expeded BOO-day profit level'l Design (1) — achieves the maximum expected SOD-day profit level. with a profit of $ . (Enter your response as a real number rounded to two decimal places.) (1)0K10K30K2