Fisher-Price toy Company (FP) designed a new doll. The fixed cost to produce the doll is $100,000. The variable cost, which includes material, labor, and shipping costs, due to supply chain disruption is uncertain. The uniform distribution with lower bound of $30 and an upper bound of $40 is assumed to be a good description of variable cost. During the holiday selling season, FP will sell the dolls for $45 each. If FP overproduces the dolls, the excess dolls will be for sale for $12 per doll. Demand for new toys during the holiday selling season is uncertain. The normal probability distribution with an average of 62,000 dolls and a standard deviation of 14,000 is assumed to be a good description of the demand. FP has tentatively decided to produce 62,000 units (the same as average demand), but it wants to conduct an analysis regarding this production quantity before finalizing the decision.

Before making a final decision on the production quantity, management wants an analysis of a more aggressive 75,000-unit production quantity and a more conservative 55,000-unit production quantity. Run your simulation with these two production quantities. What is the average profit associated with each? Round your answers to the nearest dollar. If your answer is negative, use a minus sign.

When ordering 55,000 units, the average profit is approximately $ . When ordering 75,000 units, the average profit is approximately $

f

Besides average profit, what other factors should FP consider in determining a production quantity? Compare the four production quantities (45,000; 55,000; 65,000; and 75,000) using all these factors. What trade-off occur? What is your recommendation?

If required, round Probability of a Loss to three decimal places and Probability of a Shortage to two decimal places. Round the other answers to the nearest dollar. If your answer is negative, use a minus sign.

Production Quantity	Average Net Profit	Profit Standard Deviation	Maximum Net Profit	Probability of a Loss	Probability of a Shortage
40,000	$	$	$
50,000	$	$	$
60,000	$	$	$
70,000	$	$	$

g Create a histogram using the FREQUENCY function and a column chart.