pls help

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pls help

by lawalx » Fri Dec 14, 2007 6:36 am
Hi guys, can ne1 help with this prob......... its nt gmat but still a ps, pls help urgently

Q. Gary's Pipe and Steel Company expects next year's sale to be $800 000 if the economy is strong, $500 000 if the economy is steady and $350 000 if the economy is weak. Gary believes there is a 20% probability that the economy will be strong, a 50% probability that the economy will be steady, and a 30% probability that the economy will be weak. What is the expected level of sales for next year?

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by sankruth » Fri Dec 14, 2007 6:58 am
Dunno, if this is the correct ay to solve it. I just found the average using the projected sales and probabilities.

(800000*0.2) + (500000*0.5) + (350000*0.3)

= 160000 + 250000 + 105000 = 515000

Am I right?

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by camitava » Fri Dec 14, 2007 7:18 am
lawalx, I really don;t know the approach to solve this but the problem seems to me very interesting. I have made some wild guess u can say -
Best Better Good
Profit : 8x10^6 5x10^6 3.5x10^6
Possibility: 50 30 20

Here the maximum possibility is for going better or the best. So from only this point, we can say that the profit should be between 8x10^6 and 5x10^6. Now this can be an approach.
Now diff between the profit and possibility are 1.5x10^6, 3x10^6 and 10, 20 - doubling the diff from the previous one. So the profit can be 6.5x10^6.
Is it so? What is the OA?
Mind it - I am making a wild guess to catch the approach. May be I am not correct!
Correct me If I am wrong


Regards,

Amitava

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by lawalx » Fri Dec 14, 2007 8:53 am
it is actually an MBA question, so i need a sure solution. please help me out

thanx guys

pls keep tryin


where is samir n the other probability pros.............

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Re: pls help

by jayhawk2001 » Fri Dec 14, 2007 11:17 am
I think the question is asking for a weighted average

i.e. .2 * 800k + .5 * 500k + .3*350k