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Problem 12-02 (Algorithmic) The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of
Problem 12-02 (Algorithmic) The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $32,000. The variable cost for the product is expected to be between $15 and $27 with a most likely value of $25 per unit. The product will sell for $55 per unit. Demand for the product is expected to range from 600 to 1600 units, with 1200 units the most likely demand. variable cost per unit Let c x = demand a. Develop the profit model for this product. Enter your answer in the form of an expression. (Example: (c+10)x+800) Profit b. Provide the base-case, worst-case and best-case analyses. For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300) Profit $ Base case: Worst case: Profit = $ Profit $ Best case: c. Discuss why simulation would be desirable. A simulation the probability of each scenario
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