Starting with the finished version of the file for Example 9.3, change the fixed cost in cell

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Starting with the finished version of the file for Example 9.3, change the fixed cost in cell B5 to $4000. Then get back into PrecisionTree’s One-Way Sensitivity Analysis dialog box and add three more inputs. (These will be in addition to the two inputs already there, cells B9 and B5.) The first should be the unit margin in cell B6, varied from $15 to $21 in increments of $1, the second should be the sales volume from a good market in cell C9, varied from 400 to 700 in increments of 50, and the third should be the probability of a good prediction, given a good market, in cell B14, varied from 0.7 to 0.9 in increments of 0.05. Make sure the analysis type is one-way, all five of the inputs are checked, and the starting node is “Entire Model.” In the “Include Results” section, check the Strategy Region, Tornado Graph, and Spider Graph options, and then run the analysis. Interpret the resulting outputs. Specifically, what do the tornado and spider graphs indicate?

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Practical Management Science

ISBN: 1497

5th Edition

Authors: Wayne L. Winston, Christian Albright

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