(c) Use simulation to estimate the expected profit generated for each option under both weak and strong demand scenarios. HINT: for the simulations, use 500 samples each. You will have four worksheets with simulations - OUTSOURCE-WEAK; OUTSOURCE-STRONG; MANUFACTURE-WEAK; MANUFACTURE-STRONG) For the manufacturing option, use Optimization to calculate the optimal number of e-bikes to produce for both the weak and strong demand scenarios.

Seed Number: 1855

The Case Study is below. Please help with a detailed explanation of how to run the simulations.

Case Study: Integration E-Bnoss: MANUFACTURE on omonce? \"T he fastest growing sector of the er'ectric vehicle economy in America isn 't a part ofTesia, isn 'r' the new er'ectric Ford Mustang, nor is it any of the new eiectric car brands you He never heard of\" Surprisingiy, it 's eiectric hikes. Ehihes as they 're now coiied ore outseiiing their fourwheei counterparts 2: i. Infact, eBihes said over j units in America in 232i and are expected to gain 33% by the end of323. " ABC News {August 25, 21110.2) GoTrax produces elechic bikes {ebilres} designed for the urban riders looking for a highperformance lowcost alternative to driving a car. For the past ten years, GoTraa outsourced their manufacturing process to a manufacturer in Taiwan. Despite the global supply chain that GoTrax has developed, they are considering if they should vertically integrate into manufacturing and produce the ehikes themselves. In the ebike industry, most manufacturing has been taking place in Asian countries, where there is significant lowcost labor available to produce the products. As a result, GoTrax is considering setting up their own inhouse production facility in Nepal. However, they are not ruling out the option to continue to outsource manufacturing {in Taiwan}. Given their current supplier in Taiwan, they would not need to pay any fixed cost but would have to guarantee to purchase 55K units for $1 lili} each. If they decided to produce the ebikes themselves in Nepal, they would have an estimated fixed cost of approximately $21 million dollars including mortgage, machinery, overhead and fir-red labor costs. Tire unit cost to manufacture each ebilre would be $325. The selling price of the GoTrax ehikes would be $1395 each. ne of their main concerns is regarding demand. If demand is strong, the number of ebikes they can sell is uniformly distributed between 45K and TSK. If demand is weak, the number of ebilres they can sell is uniformly distributed between EEK and 513K. There is a 613% chance that demand will be strong. If GoTrarr chooses to continue to outsource and the demand is greater than the 55K, they can only sell the 55K. ebikes that they purchased. If demand is less than the 55K ehikes, they will only earn revenue on the amount demanded even though they must purchase the full 55K ebikes from their vendor. If {3on chooses to manufacture the e-bikes themselves, they can produce an initial EDK e-bikes and then will have the option to run a second production rim of anywhere between [I and 45K additional e-bikes in response to market conditions. The timing of the second production run would be shortly after {3on learns if the market will be weak or strong. Thus. the total quantity that GoTrax can produoe will vary between 30K and TSK e-bikes that's a BDK minimum from the rst production run plus anywhere from [I to 45K units for the second run. Dnce again, given that demand varies, if {3on produces more e-bikes than the demand, it will only be able to collect revenue from the e-bikes sold and if the demand is greater than the number of e- bikes produced {after the second production run}, {3on can only sell the number of e-bikes produced