Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A manufacturer of Bluetooth headphones examines the historical demand of its product and learns that the average monthly demand is about 3 , 4 5
A manufacturer of Bluetooth headphones examines the historical demand of its product and learns that the average monthly demand is about headphones but varies between and headphones. Each pair of the headphones has a retail price of $ The monthly fixed production cost ranges from $ to $ with an average of $ The average variable cost of producing a pair of headphones is $ but because the manufacturing process is not fully automated, the variable cost may vary between $ and $ per pair. Develop a risk analysis model to answer the following questions.
What is the monthly profit from the Bluetooth headphones for the most likely, pessimistic, and optimistic scenarios?
The company notices that during the holiday season in December, the demand tends to be higher than in other months. Historically, the demand in December is about pairs on average, but also ranges from to pairs. What is the December profit for the most likely, pessimistic, and optimistic scenarios?
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