# Problem 1- TINGLE TECH and Problem 2 – MPT

December 14, 2017

PROBLEM 1
TINGLE TECH has
developed a new chip code named TICKLER which
they think will have a life cycle of two years be foreit will be replaced by a faster chip.TINGLE
TECHthinksthatinthefirstyeartheywillselleitheralowof300,000TICKLER CHIPS orahighof500,000
TICKLER CHIPS inthesecondyear,competing
productsareexpectedto reducetheTICKLER CHIPSsalestoalowof200,000orahighof400,000
units.TINGLE TECH management
believes that there is a 30% chance that sales in both years will be high, but
thereis also a 20% risk that sales will be low in both years. They are
optimistic that there is a good70% chance of high sales in the firstyear.
a.
in a joint probability table and on a Venn diagram.
b.
Ifthefirstyearsalesturnouttobehigh,whatarethechancesthattheywillbehighinthe second
year also? Show your results on a probability tree.
c.
Determine forecasts (expected values) of
sales in each of the two years.
d.
Compute the probability distribution of
total sales during its two-yearlifecycle.
e.
Determinetheforecast(expected
(b) and (ii) from (c).

PROBLEM 2
of purchasing SWL Inc. but is not sure if the company will be a profitable purchase for MPT.
CEO thinks there is a 60%chancethat SWL
willbeprofitable,inwhich
from hiscurrent retirement
package.Ofcourse,
ifhedecidesnottopurchasethecompany,hewillhaveno additional profits or losses, and he can
retire with the currentpackage.

a.
Whatshould
the CEO do?Summarizeyourresultsinapayoff