Salemach Corporation is a start-up company that manufactures machines. It is interested in analyzing the total time it takes to manufacture a proposed new product. The proposed product would have to be manufactured in three stages. It estimates that the time to complete the first stage of production is normally distributed with a mean of 11 hours and standard deviation of 5 hours. It estimates that the time to complete the second stage is normally distributed with a mean of 13 hours and standard deviation of 3 hours. Finally, it estimates that the time to complete the final stage is normally distributed with a mean of 18 hours and standard deviation of 4 hours. Implement a Monte Carlo simulation model in an Excel spreadsheet. Repeat the simulation 1000 times. For each simulation repetition, generate three random times, according to the distributions given above, and add them together to compute the total production time. From the simulation results, estimate the 84 th percentile of the total production times. Hint: Recall the steps for implementing simulations in Excel. Step 1) Generate a spreadsheet that solves for the value of interest for a given set of fixed inputs. Step 2) Replace the fixed inputs with the values randomly generated from the appropriate distribution. Step 3) Use a data table to have Excel repeat the simulation n times. Step 4) Summarize the simulation results using appropriate statistical measures. What is the estimated 84th percentile of the total production times? Round to two Salemach Corporation is a start-up company that manufactures machines. It is interested in analyzing the total time it takes to manufacture a proposed new product. The proposed product would have to be manufactured in three stages. It estimates that the time to complete the first stage of production is normally distributed with a mean of 11 hours and standard deviation of 5 hours. It estimates that the time to complete the second stage is normally distributed with a mean of 13 hours and standard deviation of 3 hours. Finally, it estimates that the time to complete the final stage is normally distributed with a mean of 18 hours and standard deviation of 4 hours. Implement a Monte Carlo simulation model in an Excel spreadsheet. Repeat the simulation 1000 times. For each simulation repetition, generate three random times, according to the distributions given above, and add them together to compute the total production time. From the simulation results, estimate the 84 th percentile of the total production times. Hint: Recall the steps for implementing simulations in Excel. Step 1) Generate a spreadsheet that solves for the value of interest for a given set of fixed inputs. Step 2) Replace the fixed inputs with the values randomly generated from the appropriate distribution. Step 3) Use a data table to have Excel repeat the simulation n times. Step 4) Summarize the simulation results using appropriate statistical measures. What is the estimated 84th percentile of the total production times? Round to two
