Question
An aluminum extrusion plant manufactures a product with a variable cost of $x/unit, due to variations in the quality of input material. Other fixed cost
An aluminum extrusion plant manufactures a product with a variable cost of $x/unit, due to variations in the quality of input material. Other fixed cost associated with the products manufacture is $20,000 with a selling price of $0.40/unit. The variable cost has the following estimated probability distribution:
x | P(x) |
0.07 | 0.05 |
0.08 | 0.10 |
0.09 | 0.20 |
0.10 | 0.30 |
0.11 | 0.20 |
0.12 | 0.10 |
0.13 | 0.05 |
A) Generate a simulated outcome of this distribution with a sample of 30 uniform random inputs and provide the simulated values for mean and standard deviation of this distribution of costs (document these outcomes) B) Based upon your simulation, what percent of the outcome would be above a $0.12/unit cost? C) Using this simulation, also develop a probability distribution for the break-even value of annual sales volume.
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