If Ed Lusk, VP for operations, proceeds with the existing prototype (option a), the firm can expect sales to be 110 comma 000 units at $580 each, with a probability of 0.65 and a 0.35 probability of 65 comma 000 at $580. If, however, he uses the value analysis team (option b), the firm expects sales of 85 comma 000 units at $740, with a probability of 0.62 and a 0.38 probability of 60 comma 000 units at $740. Value engineering, at a cost of $100 comma 000, is only used in option b. Which option has the highest expected monetary value (EMV)?

Option b has the highest expected monetary value (EMV)

Explanation:

For Option a:

At probability 0.65:                     At probability 0.35

Units=110,000                              Units=65,000

Amount=$580 each                   Amount=$580

EMV/Total Sales=0.65(110,000*580)+0.35(65,000*580)

EMV/Total Sales=$54,665,000

For Option b:

At probability 0.62:                     At probability 0.38

Units=85,000                              Units=60,000

Amount=$740 each                   Amount=$740

EMV/Total Sales=0.62(85,000*740)+0.38(60,000*740)

EMV/Total Sales=$55,870,000

So Option B has the highest expected monetary value (EMV).

steering wheels are always situated on the left side of the car.

always drive on the right side of the road.

white lines separate lanes of traffic traveling the same direction.

hashed or broken lines means you may change lanes when it is safe.

solid white lines mean stay in your lane.

yellow lines separate traffic moving in opposing directions.

hashed or broken yellow lines mean you can carefully pass, paying attention to oncoming traffic.

never cross a solid yellow line (or double yellow line).

when turning left at an intersection, pass in front of any cars that are turning left from the opposing direction (do not try to pass behind them).

use the left lane to pass other cars traveling your direction.

do not pass in the right lane unless absolutely necessary.

if you are driving in the far left hand lane and someone would like to pass you, move over to the right lane when it is safe to do so and allow them to pass.

you must always yield to pedestrians.

come to a complete stop whenever you see pedestrians trying to cross the street.

never pass a school bus if it has flashing red lights. wait until the lights have stopped.

be aware of bicyclists. often they share the road with cars and are supposed to also follow general traffic laws.

be particularly careful about driving in cities with bike lanes -- always check before turning that a bike is not coming.

it is mandatory to pull over or stop at an intersection to allow an emergency vehicle to pass you if you see one traveling with lights flashing and/or a siren running.

do not overuse your car horn. horns are used almost exclusively for emergency situations or for when you feel unsafe.

explanation:

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.