Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Statistics and Probability Expert

The Lake Placid Town Council has decided to build up a new community center to be employed for conventions, concerts, and other public events. But, considerable controversy surrounds proper size. Many influential citizens want the large center that would be the showcase for area. But the mayor feels that if demand doesn't support such a center,the community will lose the large amount of money. To provide structure for decision process, the council narrowed the building alternatives to three sizes: small, medium, and large. Everybody agreed that critical factor in selecting the best size is the number of people who will want to employ the new facility. A regional planning consultant provided demand approximates under three scenarios: worst case, base case, and best case. The worst-case scenario corresponds to the situation in which tourism drops significantly; the base-case scenario corresponds to a situation in which Lake Placid continues to attract visitors at current levels; and best-case scenario corresponds to a significant rise in tourism. The consultant has provided probability assessments of 0.10, 0.60, and 0.30 for worst-case, base-case, and best-case scenarios, respectively.

The town council suggested using net cash flow over five-year planning horizon as the criterion for deciding on the best size. The following projections of net cash flow, in thousands of dollars, for the five-year planning horizon have been developed. All costs, comprising the consultant's fee, have been included. 

 

Worst Case

Base Case

Best Case

Small

400

500

660

Medium

-250

650

800

Large

- 400

580

990

The consultant suggested that the expenditure of $150,000 on promotional campaign over the planning horizon will effectively minimize the probability of worst case scenario to zero. If the campaign can be expected to also to raise the probability of best case scenario to 0.4, is it a good investment.

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M917753

Have any Question? 


Related Questions in Statistics and Probability

Suppose that fara is preferred by every man to all the

Suppose that Fara is preferred by every man to all the other women. Prove that under every stable matching Fara is matched to the same man. Who is the lucky guy?

Many grocery stores and large retailers such as wal-mart

Many grocery stores and large retailers such as Wal-Mart and K-Mart have installed self checkout systems so shoppers can scan their own items and cash out themselves. How do customers like this service and how often do t ...

Your statistics teacher knowing the power of sampling

Your statistics teacher, knowing the power of sampling, decides to use only 3 of your 5 quiz grades in assigning your grade for the course, chosen at random. Your quiz average using all 5 quizzes is 81.6, with a standard ...

An auditor claims that the average annual salary of a

An auditor claims that the average annual salary of a project manager at a construction company exceeds $82,000. A random sample of 20 project managers had an average salary of $89,600 with a sample standard deviation of ...

Goofys fast food center wishes to estimate the proportion

Goofy's fast food center wishes to estimate the proportion of people in its city that will purchase its products. Suppose the true proportion is 0.07. If 475 are sampled, what is the probability that the sample proportio ...

In a study of smokers who tried to quit smoking with

In a study of smokers who tried to quit smoking with nicotine patch therapy, 39 were smoking one year after the treatment, and 32 were not smoking one year after the treatment. We want to use a .05 significance level to ...

An insurance company checks police records on 1200 randomly

An insurance company checks police records on 1200 randomly selected auto accidents and notes that teenagers were at the wheel in 180 of them. Construct a 90% confidence interval estimate of the proportion of auto accide ...

1 a successive independent survey design and a longitudinal

1. A successive independent survey design and a longitudinal survey design both examine changes in responses over time. How do they differ in their approach? 2. Distinguish between demographic and epidemiological researc ...

Using the standard normal distribution tables what is the

Using the standard normal distribution tables, what is the area under the standard normal curve corresponding to Z

1 what are order effects and how does counterbalancing help

1. What are order effects, and how does counterbalancing help us deal with them? 2. Distinguish between treatment, confound, and error variance. 3. Which is worse--confound variance or error variance? Why?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen