Redesign its kitchens to improve productivity and quality

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Reference no: EM131277290

McBurger, Inc., 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 production of sandwiches at a typical McBurger restaurant is for 600 sandwiches. A sandwich costs $ 1.30 to produce.? Non-defective sandwiches? sell, on the? average, for $ 2.75 per sandwich. Defective sandwiches cannot be sold and are tossed.

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 $ 100,000, $ 140,000, and $ 180,000, respectively.

Under design? K1, there is a .80 chance that 90 out of each 100 sandwiches are? non-defective and a .20 chance that 70 out of each 100 sandwiches are? non-defective. Under design? K2, there is a .85 chance that 90 out of each 100 sandwiches are? non-defective and a .15 chance that 75 out of each 100 sandwiches are? non-defective. Under design? K3, there is a .90 chance that 95 out of each 100 sandwiches are? non-defective and a .10 chance that 80 out of each 100 sandwiches are? non-defective.

The expected profit level of design K1 is __ (Enter your response as a real number rounded to two decimal places.?)

The expected Profit leve of design K2 is ___

The expected profit level of design k3 is__

Reference no: EM131277290

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