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Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month.
The probability that demand will be 6 cases is .1, for 7 cases it is .3, for 8 cases it is .5, and for 9 cases it is .1. The cost of every case is $45, and the price Susan gets for each case is $95.
Unfortunately, any cases not sold by the end of the month are of no value as a result of spoilage. How many cases should Susan manufacture each month.
Assume a project has normal cash flows. All else equal, which of the following statements is correct?
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Complete risk management planning by providing an oultine of risk management plan and providing a brief description of the project.
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