Show your work with Excel and Solver: Pizza King (PK) and Noble Greek (NG) are competitive...

Show your work with Excel and Solver:

Pizza King (PK) and Noble Greek (NG) are competitive pizza chains. PK believes there is a 30% chance that NG will charge $8 per pizza, a 50% that NG will charge $10 per pizza, and a 20% chance that NG will charge $12 per pizza. If PK charges price p1 and NG charges price p2, PK will sell 100 + 25(p2 – p1) pizzas. It costs PK $6 to make a pizza. PK is considering charging $7, $8, $9, $10, or $11 per pizza. To maximize its expected profit, what price should PK charge for a pizza?

Solutions

Expert Solution

		States of nature			Expected
	NG's price	$8	$10	$20	Monetary
	Probability	30%	50%	20%	Value
Pricing of PK	$7	$125	$175	$425	$210
	$8	$200	$300	$800	$370
	$9	$225	$375	$1,125	$480
	$10	$200	$400	$1,400	$540
	$11	$125	$375	$1,625	$550 (max)

Calculations

Decision: Based on the maximum expected monetary value rule, PK should select a price of $11.

keosha answered 5 months ago

Next > < Previous

Related Solutions

Pizza King (PK) and Noble Greek (NG) are competitive pizza chains. PK believes there is a 30%...

D. Pizza King (PK) and Noble Greek (NG) are competitive pizza chains. PK believes there is...

D. Pizza King (PK) and Noble Greek (NG) are competitive pizza chains. PK believes there is a 30% chance that NG will charge $8 per pizza, a 50% that NG will charge $10 per pizza, and a 20% chance that NG will charge $12 per pizza. If PK charges price p1 and NG charges price p2, PK will sell 100 + 25(p2 – p1) pizzas. It costs PK $6 to make a pizza. PK is considering charging $7, $8, $9,...

Show your work with Excel and Solver: A city in Ohio is considering replacing its fleet...

Show your work with Excel and Solver: A city in Ohio is considering replacing its fleet of gasoline powered cars with electric cars. The manufacturer of the electric cars claims that this municipality will experience significant cost savings over the life of the fleet if it chooses to pursue this conversion. If the manufacturer is correct, the city will save about $1.5 million. If the new technology employed within the electric cars is faulty as some critics suggest, it will...

Create an excel workbook for the following questions. Answer these questions under your Solver work for...

Create an excel workbook for the following questions. Answer these questions under your Solver work for each respective problem. 1. Devos Inc. is building a hotel. It will have 4 kinds of rooms: suites where customers can smoke, suites that are non-smoking, budget rooms where the customers can smoke, and budget rooms that are non-smoking. When we build the hotel, we need to plan for how many rooms of each type we should have. The following are requirements for the...

Use Excel to show your work and include the formula in the cell to show how...

Use Excel to show your work and include the formula in the cell to show how you arrived at your figures. Round percentages (example if 49.2, round to 49). Background: ABC, Inc., produces widgets. The company manufactures three levels of widgets-Economy, Better and Best. Selected information on the widgets is given below. Economy Better Best Selling price per widget $40.00 $60.00 $90.00 Variable expense per widget production $22.00 $27.00 $31.50 Selling (5% of selling price) $2.00 $3.00 $4.50 All sales...

Show your work in Excel and submit your excel sheet. Q. Your brother, age 30, working...

Show your work in Excel and submit your excel sheet. Q. Your brother, age 30, working for ABC Corp. wants to quit his job and go back to school for MBA degree. At his current job, he is making $60000 per year and was planning to work until age 65 years. If he goes back to school, he will forego two years of income, but his real income after graduation would be $90000 per year until retirement at age 65....

When do people use Solver(in excel) in their work field on a daily basis? Is it...

When do people use Solver(in excel) in their work field on a daily basis? Is it an important function?

In EXCEL Please: you must show your work in Excel, which includes providing the formulas in...

In EXCEL Please: you must show your work in Excel, which includes providing the formulas in the cells, not just the summary value. You may not earn full points if you do not show your work in detail. JLR Enterprises provides consulting services throughout California and uses a job-order costing system to accumulate the cost of client projects. Traceable costs are charged directly to individual clients; in contrast, other costs incurred by JLR, but not identifiable with specific clients, are...

Formulate the problem as a linear programming model use excel and show your excel work. Thank...

Formulate the problem as a linear programming model use excel and show your excel work. Thank you. To (cost, in 100's) From New york Philadelphia Chicago Boston Supply Tampa $9 $14 $12 $17 200 Miami 11 10 6 10 200 Fresno 12 8 15 7 200 Demand 130 170 100 50

Please use excel and show all work and formulas. (I will give your work a like...

Please use excel and show all work and formulas. (I will give your work a like if you do this) Size (1000s sq. ft) Selling Price ($1000s) 1.26 117.5 3.02 299.9 1.99 139.0 0.91 45.6 1.87 129.9 2.63 274.9 2.60 259.9 2.27 177.0 2.30 175.0 2.08 189.9 1.12 95.0 1.38 82.1 1.80 169.0 1.57 96.5 1.45 114.9 What are the p-values of the t test (for the slope estimate) and F test? What is the coefficient of determination? What is...

Subjects