Question
3.1 The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. The selling price for
3.1 The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. The selling price for the product will be $45 per unit. Probability distributions for the purchase cost, the labor cost, and the transportation cost are estimated as follows:
Procurement Cost ($) | Probability | Labor Cost ($) | Probability | Transportation Cost ($) | Probability |
---|---|---|---|---|---|
10 | 0.25 | 20 | 0.10 | 3 | 0.75 |
11 | 0.45 | 22 | 0.25 | 5 | 0.25 |
12 | 0.30 | 24 | 0.35 | ||
25 | 0.30 |
1.21. Compute profit per unit for base-case (most likely), worst-case, and best-case scenarios.
| Base Case using most likely costs Profit = 45 (11 + 24 + 3) = $7 per unit Worst Case Profit = 45 (12 + 25 + 5) = $3 per unit Best Case Profit = 45 (10+ 20 + 3) = $12 per unit THIS ONE IS DONE!! |
2.22. Construct a simulation model to estimate the mean profit per unit. | Please explain how to do this on excel |
3.23. Why is the simulation approach to risk analysis preferable to generating a variety of what-if scenarios?
| [write your paragraph here] |
4.24. Management believes that the project may not be sustainable if the profit per unit is less than $5. Use simulation to estimate the probability that the profit per unit will be less than $5. 5. | [write your paragraph here] |
3.2 Construct a spreadsheet simulation model to simulate 10,000 rolls of a die with the six sides numbered 1, 2, 3, 4, 5 and 6.
6.25. Construct a histogram of the 10,000 observed dice rolls.
|
|
7.26. For each roll of two dice, record the sum of the dice. Construct a histogram of the 10,000 observations of the sum of two dice.
|
|
8.27. For each roll of three dice, record the sum of the dice. Construct a histogram of the 10,000 observations of the sum of three dice.
|
|
9.28. Compare the histograms in parts (a), (b) and (c). What statistical phenomenon does this sequence of charts illustrate? (Hint: see Appendix 14.2) 10. |
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started