Question

Bronco Truck Parts expects to sell the following number of units at the prices indicated under three different scenarios in the economy. The probability of each outcome is indicated. Outcome Probability Units Price A 0.40 350 $ 21 B 0.10 600 30 C 0.50 1,050 35 What is the expected value of the total sales projection?

Answer 1

Answer:

Expected value of Total Sales projection is $23,115.

Explanation:

First of all we calculate expected sales projection by multiplying the probability with units, then multiply it to each unit price we will get the expected sales value of each outcome. Adding expected sales value of all outcomes, we will get the total expected sales value.

Outcome   Probability Units   Sales Volume   Price    Total Sales

                          P          U           V=P x U           S          TS=V x S

     A              0.40       350           140               $21        $2,940

     B              0.10        600           60                $30       $1,800

     C             0.50       1,050         525              $35       $18,375

Total                                               727                             $23,115

Expected Total Sale projection is 727 units and value is $23,115