Robert's Furniture

Mr. Roberts runs a furniture rental stores. The monthly demands are between 20 and 100 orders. The average contribution per order is $700. Mr. Roberts operates from a rental store and his monthly expenses are as follows The need of helpers varies depending on the demand as follows; Typical Income Statement at the high end and the low end of the demand is given as follows Since there is a big difference of profit between the high end and low end of the demand Mr. Roberts would like an estimate of the expected profits, its standard deviation and the range of profit that he can expect 95% of the time. Use the attached Excel Sheet if you wish, where the demand formula has been calculated. Required: a) What is the average demand? What will be the income statement on average demand? (10 points) deviation, and the 95% limits of that profit? (20 points) c) What is the probability of breaking even? (10 points) d) How much is the expected profit different from the profit on expected demand? Are these supposed to be same or different? Explain. (10 points) Your answers should be based on 1000 trials. Mr. Roberts runs a furniture rental stores. The monthly demands are between 20 and 100 orders. The average contribution per order is $700. Mr. Roberts operates from a rental store and his monthly expenses are as follows The need of helpers varies depending on the demand as follows; Typical Income Statement at the high end and the low end of the demand is given as follows Since there is a big difference of profit between the high end and low end of the demand Mr. Roberts would like an estimate of the expected profits, its standard deviation and the range of profit that he can expect 95% of the time. Use the attached Excel Sheet if you wish, where the demand formula has been calculated. Required: a) What is the average demand? What will be the income statement on average demand? (10 points) deviation, and the 95% limits of that profit? (20 points) c) What is the probability of breaking even? (10 points) d) How much is the expected profit different from the profit on expected demand? Are these supposed to be same or different? Explain. (10 points) Your answers should be based on 1000 trials