Explain build the pilot project and then make a decision, Operation Management

Assignment Help:

Dan Reid, chief engineer at New Hampshire Chemical, Inc., has to decide whether to build a new state-of-art processing facility. If the new facility works, the company y could realize a profit of $200,000. If it fails, New Hampshire Chemical could lose $150,000. At this time, Reid estimates a 60% chance that the new process will fail. The other option is to build a pilot plant and then decide whether to build a complete facility. The pilot plant would cost $10,000 to build. Reid estimates a fifty-fifty chance that the pilot plant will work. If the pilot plant works, there is a 90% probability that the complete plant, if it is built, will also work. If the pilot plant does not work, there is only a 20% chance that the complete project (if it is constructed) will work. Reid faces a dilemma. Should he build the plant? Should he build the pilot project and then make a decision? Help Reid by analyzing this problem.


Related Discussions:- Explain build the pilot project and then make a decision

Explain if microsoft don''t build a cloud computing business, If Microsoft ...

If Microsoft don't build a cloud computing business, what will happen to them in the next decade? Why did the company decided that it had little choice but invest in cloud?

What is lowest possible cost, Doing something at the lowest possible cost i...

Doing something at the lowest possible cost is called: ________________. Effectiveness Efficiency Productivity Evaluation Application

Explain current average time the trucks spend in the system, You are in cha...

You are in charge of a quarry that supplies sand and stone aggregates to your company's construction sites. Empty trucks from construction sites arrive at the quarry's huge piles o

Explain appellate jurisdication, Stan Garner resides in illinois and promot...

Stan Garner resides in illinois and promotes boxing matches for Supersports, INC. an Illinois corporation. Garner created the conect of "ages" promotion- a three fight series of bo

Explain term everybody''s doing it, How common do you think it is for peopl...

How common do you think it is for people to try to justify their conduct by the argument that "Everybody's doing it"? Give examples from your own experience.

Find average inventory, A grocery store needs to sell 3,000 cartons of 2L 2...

A grocery store needs to sell 3,000 cartons of 2L 2% milk per month. The sales is relatively constant throughout the month. The owner of this grocery store purchases milk from a su

Evaluate the servicescape dimensions, Question: (a) Services are usuall...

Question: (a) Services are usually produced and consumed simultaneously, and in many cases the customer has to enter the service facilities and be within the servicescape befo

Explain project charter is to help the project team, One purpose of the pro...

One purpose of the project charter is to help the project team and the project sponsor to commit to the project

What is reliability is decriminator in cost of gps receivers, The DAGR GPS ...

The DAGR GPS receiver will have a 25% increase inreliability over the PLGR GPS receiver. Using the PLGR as an analogy, an analyst estimated that the DAGR would cost 25% more than t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd