A sporting goods company is considering the introduction of a new fitness tracker. The fixed cost is estimated to be $300,000. The variable cost to produce the product is expected to be between $160 and $240 with a most likely value of $200, and the product will sell for $300. Demand estimates vary widely ranging from 0 to 20,000 units, with 4,000 units being the most likely.

What is the expected profit for the base case; i.e., using average values of the demand and cost estimates? (enter in thousands, no comma or $-sign) $ ________

Because demand is so uncertain the company has decided to model it as 1,000 times the value of a gamma random variable with = 2 and = 3. Construct a simulation model to estimate the mean profit and the probability that the project will result in a loss.

Mean profit (round to nearest thousand $) $ _______

Probability of a loss (round to nearest %) ________%