25 million in the event that gerber waits for the

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Unformatted text preview: t also a 75 % probability that a recall would hurt sales by $1.25 million. In the event that Gerber waits for the CSPC report before taking action. With a favorable report and a delayed response, there is a 25% chance that sales would remain flat, along with a 75% chance that sales would decline by $2 million. The worst-case scenario is if Gerber remains passive and there is a recall. In that case, there is still a 20 % probability that Gerber could increase sales by $.5 million. However, it was considered an 80% probability that significant 4 volume would be lost ($10 million). Part 3....
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This note was uploaded on 03/18/2014 for the course MGMT 15.053 taught by Professor Jamesorli during the Spring '07 term at MIT.

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