Cooke collectibles produces fine porcelain miniatures


Cooke Collectibles produces fine porcelain miniatures representing famous people and historical events. To avoid production and scheduling problems, Cooke's policy is to make all copies of a figure in one production run. In the event that the demand for any figure exceeds the number produced, each customer's money is returned along with a coupon good for $10.00 toward the purchase of another Cooke miniature. If the company makes too many figures, the extras are sold to a discount outlet, which agrees to hold them for six months, for $50.00 each. This price is half the variable production cost of a figure. Cooke Collectibles has recently agreed to pay $200,000 for the rights to produce a miniature representing a famous singer. The company plans to sell the figures for $250 each. The marketing department predicts that actual demand will equal one of these possible demand levels: 20,000; 40,000; 60,000; or 80,000.

a) Setup a payoff table for all combinations of production and demand

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Business Economics: Cooke collectibles produces fine porcelain miniatures
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