McBurger, Inc., wants to redesign its kitchens to improveproductivity and quality. Three? designs, called designs? K1, K2,and? K3, are under consideration. No matter which design is? used,daily production of sandwiches at a typical McBurger restaurant isfor 500 sandwiches. A sandwich costs
$1.40 to produce.? Non-defective sandwiches? sell, on the?average, for $ 2.75 per sandwich. Defective sandwiches cannot besold and are scrapped.
The goal is to choose a design that maximizes the expectedprofit at a typical restaurant over a? 300-day period. Designs? K1,K2, and K3 cost $115,000?,
$120,000, $140,000?, respectively.
Under design? K1, there is a .80 chance that 90 out of each100 sandwiches are? non-defective and a .20 chance that 70 out ofeach 100 sandwiches are? non-defective. Under design? K2, there isa .85 chance that 90 out of each 100 sandwiches are? non-defectiveand a .15 chance that 75 out of each 100 sandwiches are?non-defective. Under design? K3, there is a .90 chance that 95 outof each 100 sandwiches are? non-defective and a .10 chance that 80out of each 100 sandwiches are? non-defective.
The expected profit level of design K1 is ?$ _____
The expected profit level of design K2 is ?$ _____
The expected profit level of design K3 is ?$ _____
(Enter your responses as a real number rounded to two decimalplaces)
