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?

Question

Business

Stanley Schneider

26 September, 19:33

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?

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Dominique Bass · Answer 1

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