Question

A small entrepreneurial company is trying to decide between developing two different products that they believe they can sell to two potential companies, one large and one small. If they develop Product A, they have a 50% chance of selling it to the large company with annual purchases of about 20,000 units. If the large company won't purchase it, then they think they have an 80% chance of placing it with a smaller company, with sales of 15,000 units. On the other hand if they develop Product B, they feel they have a 40% chance of selling it to the large company, resulting in annual sales of about 17,000 units. If the large company doesn't buy it, they have a 60% chance of selling it to the small company with sales of 20,000 units.

*Need excell formula for each cell*

	What is the probability that Product A will be purchased by the smaller company?
	What is the probability that Product B will be purchased by the smaller company?
	How many units of Product A can they expect to sell?
	How many units of Product B can they expect to sell?

Answer 1

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