Question
Implement a financial simulation model for a new product proposal and determine a distribution of profits using the provided discrete distributions for the unitcost, demand,
Implement a financial simulation model for a new product proposal and determine a distribution of profits using the provided discrete distributions for the unitcost, demand, and fixed costs. Price is fixed at $1,000. Simulate this model for 50 trials and a production quantity of 140. What is the averageprofit?
Unit Cost Probability
400 0.25
600 0.40
700 0.25
800 0.10
Demand Probability
120 0.20
140 0.55
160 0.25
Fixed Costs Probability
45,000 0.20
50,000 0.50
55,000 0.30
Simulation Results
11000
-19000
6000
14000
-22000
39000
-13000
34000
6000
-28000
-8000
-22000
-13000
29000
-8000
11000
-33000
9000
-17000
11000
6000
-9000
-8000
34000
6000
6000
-23000
6000
-19000
-8000
6000
-13000
34000
-8000
29000
-8000
34000
-13000
6000
11000
-17000
29000
11000
11000
6000
34000
-28000
34000
29000
-28000
Set up a lookup table for the unit cost.
(Type integers or decimals. Do not round. Use ascendingorder.)
Unit Cost Probability Lower Limit Upper Limit
$400 0.25 0 0.25 $400
$600 0.40 0.25 0.65 $600
$700 0.25 0.65 0.90 $700
$800 0.10 0.90 1.00 $800
Set up a lookup table for the demand.
(Type integers or decimals. Do not round. Use ascendingorder.)
Demand Probability Lower Limit Upper Limit
120 0.20 0 0.20 120
140 0.55 0.20 0.75 140
160 0.25 0.75 1 160
Set up a lookup table for the fixed costs.
(Type integers or decimals. Do not round. Use ascendingorder.)
Fixed Costs Probability Lower Limit Upper Limit
45,000 0.20 0 0.20 $45,000
50,000 0.50 0.20 0.70 $50,000
55,000 0.30 0.70 1 $55,000
Suppose a Monte Carlo simulation using these lookup tables generated the 50 trial results in the problem statement. What is the average profit of thissimulation?
The average profit is $ .
(Round to the nearest dollar asneeded.)
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