Mr. Ramon Ang, the president of RMC Corporation is faced with deciding whether to purchase a patent to develop a new product or not. If the company purchases the patent, it should develop the product. The selling price of the patent is P50,000. There are two ways of developing the product: the Modern method and the Traditional method. It costs P20,000 to use the modern method, and P15,000 for the traditional method. The probability of success of the modern method is 60%, while it is 70% for the traditional method. If the product is successfully developed, it will give an income of P500,000. What conclusion can you reach if you are the operations manager? Justify your decisions
Mr. Ramon Ang, the president of RMC Corporation is faced with deciding whether to purchase a patent to develop a new product or not. If the company purchases the patent, it should develop the product. The selling price of the patent is P50,000. There are two ways of developing the product: the Modern method and the Traditional method. It costs P20,000 to use the modern method, and P15,000 for the traditional method. The probability of success of the modern method is 60%, while it is 70% for the traditional method. If the product is successfully developed, it will give an income of P500,000. What conclusion can you reach if you are the operations manager? Justify your decisions
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Mr. Ramon Ang, the president of RMC Corporation is faced with deciding whether to purchase a patent to develop a new product or not. If the company purchases the patent, it should develop the product. The selling price of the patent is P50,000. There are two ways of developing the product: the Modern method and the Traditional method. It costs P20,000 to use the modern method, and P15,000 for the traditional method. The probability of success of the modern method is 60%, while it is 70% for the traditional method. If the product is successfully developed, it will give an income of P500,000. What conclusion can you reach if you are the operations manager? Justify your decisions.
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