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February 19, 2024

Question 1

					Net Profit	Plants		Capacity Configuration	Plant
					Products	1	2	Products	1	2	Demand
			Demand: A: 1000; B: 1000		A	7	10	A			1000
				Probability: 0.25	B	6	4	B			1000
					Profit:			Capacity	2000	2000
		Demand A: 1000
					Net Profit	Plants		Capacity Configuration	Plant
			Demand: A: 1000; B: 3000		Products	1	2	Products	1	2	Demand
				Probability: 0.25	A	7	10	A			1000
Overall Expected Profit:					B	6	4	B			3000
	Start				Profit:			Capacity	2000	2000
					Net Profit	Plants		Capacity Configuration	Plant
			Demand: A: 3000; B: 1000		Products	1	2	Products	1	2	Demand
				Probability: 0.25	A	7	10	A			3000
					B	6	4	B			1000
		Demand A: 3000			Profit:			Capacity	2000	2000
			Demand: A: 3000; B: 3000		Net Profit	Plants		Capacity Configuration	Plant
				Probability: 0.25	Products	1	2	Products	1	2	Demand
					A	7	10	A			3000
					B	6	4	B			3000
					Profit:			Capacity	2000	2000

Hint:
Step 1: Under each demand scenario, try to figure out how much to produce for products A and B in Plants 1 and 2 in the gray area. The production plan you propose should maximize the profit under this demand scenario.
Step 2: Calculate the corresponding profit given the production plan you proposed in the light blue area.
Step 3: Calculate the overall expected profit that summarizing all the demand senarios. Report it in the light green area.
Step 4: Answer the following questions in the textbox.

Question: Why the capacity at these plants is sometimes larger than the demand?

Your answer:

Question 2

Question 2a:

Your answer:

Question 2b:

Your answer:

Question 2c:

Your answer:

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