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Demand Probability and Revenue Analysis

The document contains a table that shows the probability of different levels of demand for a product, the probability of selling all units produced at each demand level, and the expected demand. It also includes calculations for expected revenue from sales and unsold units, costs, and potential profits from producing additional units or not. The goal is to determine the optimal production quantity to maximize expected profit.

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ashish chopra
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6 views7 pages

Demand Probability and Revenue Analysis

The document contains a table that shows the probability of different levels of demand for a product, the probability of selling all units produced at each demand level, and the expected demand. It also includes calculations for expected revenue from sales and unsold units, costs, and potential profits from producing additional units or not. The goal is to determine the optimal production quantity to maximize expected profit.

Uploaded by

ashish chopra
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Prob (selling all Expected

Demand Prob(Demand) units produced) number


3 0.05
4 0.12
5 0.2
6 0.24
7 0.17
8 0.14
9 0.08
Expected
Total number Revenue by Revenue from
sold selling unsold Cost Profit
Prob (selling all Expected
Demand Prob(Demand) units produced) number
22 0.05
24 0.1
26 0.15
28 0.2
30 0.2
32 0.15
34 0.1
36 0.05

Prob (selling all Profit of selling


Demand Prob(Demand) units produced) additional units
22 0.05
24 0.1
26 0.15
28 0.2
30 0.2
32 0.15
34 0.1
36 0.05
Expected Total Expected Total Revenue by Revenue from
number sold number unsold selling unsold Cost

Loss of not
selling
additional units
Profit
Expected
Prob(Deman Prob (selling Expected Total Revenue by Revenue
Demand d) all units) number number sold selling from unsold Cost
1800 0.05
2000 0.1
2200 0.2
2400 0.3
2600 0.2
2800 0.1
3000 0.05

Profit of Loss of not


Prob (selling selling selling
Prob(Deman all units additional additional
Demand d) produced) units units
1800 0.05
2000 0.1
2200 0.2
2400 0.3
2600 0.2
2800 0.1
3000 0.05
Profit

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