DEVRY BSOP 209 Week 6 Homework
Assignment
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A.2
Even though independent gasoline stations have been having a difficult time, Susan Helms has been
thinking about starting her own independent gasoline station. Susan’s problem is to decide how large
her station should be. The annual returns will depend on both the size of her station and a number of
marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Susan
developed the following table:
Size of First Station
Small
Medium
Large
Very Large
Good Market ($)
50000
80000
100000
300000
Fair Market ($)
20000
30000
30000
25000
Poor Market ($)
-10000
-20000
-40000
-160000
For example, if Susan constructs a small station and the market is good, she will realize a profit of
$50,000.