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Question: A company must decide now which of three products to make next year to plan & order proper material. The cost per unit of producing each product will be determined by whether a new union labor contract passes or fails. The cost per unit of each product, giving each contract result is shown in the following pay off table.

 

Contract Outcome

Product

Pass

Fail

1

$7.50

$6.00

2

4.00

7.00

3

6.5

3.00

 

 

 

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