2019-02-01T10:58:27+00:00 essay assignments

# 1. A chemical company is building a plant to market Zircag, a new chemical used primarily in agriculture.

This paper concentrates on the primary theme of 1. A chemical company is building a plant to market Zircag, a new chemical used primarily in agriculture. in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 79. For more details and full access to the paper, please refer to the site.

# expected value of perfect information

1. A chemical company is building a plant to market Zircag, a new chemical used primarily in agriculture. The firm is uncertain about the demand for Zircag during the initial year of sales. However, the following probability distribution was assessed.

Demand for Zircag for Initial Year (kilograms)
Probability
800 0.2
1,000 0.4
1,200 0.3
1,400 0.1

Zircag is produced on a special-purpose machine. Each such machine has a yield of 200 kilograms of Zircag per year. The fixed cost of purchasing and operating one machine is \$560,000 per year, which includes supervision, maintenance, and other fixed charges, plus annualized interest and equipment costs. Suppose the profit from one year`s production of one machine (but not covering the fixed costs) is \$1.3 million, assuming demand is sufficient to run the machine for the entire year.

The problem facing the chemical company is to decide how many machines to install in the plant for the first year. The second and subsequent years pose little problem, because the firm is able to buy additional machines if needed, and any unused capacity can be absorbed in future years as sales grow.

a) How many machines should the firm install to maximize expected net profit in the first year?
b) What is the EMV of this action?
c) What would be the expected value of perfect information for this problem?
d) What is the company`s risk profile if they take your recommended action?

0% Plagiarism Guaranteed & Custom Written, Tailored to your instructions

International House, 12 Constance Street, London, United Kingdom,
E16 2DQ

## STILL NOT CONVINCED?

We've produced some samples of what you can expect from our Academic Writing Service - these are created by our writers to show you the kind of high-quality work you'll receive. Take a look for yourself!

FLAT 25% OFF ON EVERY ORDER.Use "FLAT25" as your promo code during checkout