Assume a major fruit and vegetable company is proposing a guaranteed Minimum Price (GMP) to buy all of Maria's organic bananas, regardless of the amount she grows. The company has set its GMP at $260 per tonne. Modify the existing model (posted below), then use the revised model to answer the questions below based upon the implementation of a GMP. All answers and relevant graphs/@Risk functions used should be placed in the final model worksheet (also, make sure to save results from your simulation). Note that, for the revised model, you will want to have a new/separate output for organic bananas with the GMP so you can compare the results to organic bananas without the GMP (i.e. you will want to track the profit both with and without the GMP in your model). 2a) At a GMP at $260 per tonne, what would be the company's expected incremental cost per hectare (i.e., incremental relative to paying the market price for Maria's organic bananas)? b) Then, suppose that the company's objective is to get Maria to plant all organic bananas. Assuming this goal is accomplished, what would be the total expected cost for the company? c) What is the probability the incremental cost is zero? 2a) How does the GMP affect Maria's expected profits, assuming all organic bananas are planted and what is the impact on the risk of losing money? b) How does this now compare to 100% conventional? c) How would this impact (or not) your recommendation to Maria on the amounts of each type of banana to plant? (Assume the initial recommendation was to be risk averse and plant zero organic bananas). A B C D E F G H K 1 Inputs 2 Number of Hectares 100 Random Variable Parameters 3 Conventional Bananas Distribution Mean Std Dev Correlation Correlation Matrix Conventional yield Conventional yield Organic yield Conventional Price 1 4 Yield (tonnes per hectare) 10.0 Normal 10.0 0.8 Organic yield 0.7 5 Price ($ per tonne) $220 Normal $220 $28 -0.5 Conventional Price -0.5 1 0 1 6 Organic Bananas 7 Yield (tonnes per hectare) 8.8 Normal 8.8 2.4 0.7 8 Price premium (%) 15.0% Lognormal 15% 2.5% 9 Price ($ per tonne) $253 10 Cost ($ per hectare) $1,800 Normal $1,800 $300 11 12 Decision Variables 13 Conventional Hectares Planted 14 Organic Hectares Planted 15 16 Calculations 17 Revenue ($ per hectare) 18 Conventional 19 Organic 20 0 RiskSimTable 100 0 25 50 75 $2,200 100 $2,226 21 Outputs 22 Profit per hectare 23 Conventional $400 24 Organic $426 25 Profits 26 Conventional 27 Organic $0 $42,640 28 Total $42,640 29 Prob Org > Conv (per hectare)