# – NewModule6ProblemWorkbook.xlsx

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 Acme single-stage new product decision Decision 1: Continue development and market the new product Fixed cost \$6,000 Unit margin \$18 Market Probability Sales volume Net revenue Great 0.45 600 \$10,800 Fair 0.35 300 \$5,400 Awful 0.20 90 \$1,620 EMV \$1,074 Decision 2: Stop development and abandon product No payoffs, no costs, no uncertainty EMV \$0 1. Sensitivity to probability in cell B8 (Use one-way data table) 2. Explain the data table results.

All monetary values (except the unit margin in cell B5) are in \$1000s, and all sales volumes are in 1000s of units.

 Automobile inspections Given Probabilities: Probability P(inspected car has problems) P(inspected car has no problems) P(no problem found | inspected car has problems) P(problem found | inspected car has problems) P(no problem found | inspected car has no problems) P(problem found | inspected car has no problems) 1. The goal is to find P(inspected car has problems | no problem was found). P(inspected car has problems | no problem was found) = P(inspected car has problems AND no problem found)/P(no problem found) = P(no problem found | inspected car has problems)*P(inspected car has problems)/ (P(no problem found | inspected car has problems)*P(inspected car has problems) + P(no problem found | inspected car has no problems)*P(inspected car has no problems)) which is equal to …(results) 2. Provide a brief clarification discussion about your results.

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