For the Outsourcing Decision Model, suppose that the demand volume is lognormally distributed with a mean of

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For the Outsourcing Decision Model, suppose that the demand volume is lognormally distributed with a mean of 1,500 and standard deviation of 500.

What is the distribution of the cost differences between manufacturing in-house and purchasing? What decision would you recommend? Define both the cost difference and decision as output cells. Because output cells in Analytic Solver Platform must be numeric, replace the formula in cell B20 with =IF(B19<=0,1,0); that is, 1 represents manufacturing and 0 represents outsourcing.

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Business Analytics

ISBN: 9781292095448

2nd Global Edition

Authors: James R. Evans

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