same as average demand), but it wants to conduct an analysis regarding this production quantity before finalizing the decision. (a) Determine the equation for computing FTC's profit for given values of the relevant parameters (e.g., demand, production quantity, etc.). Using this equation, compute FTC's profit (in dollars) when realized demand is equal to 60,000 (the average demand). 5 5 (c) Compare the average profit estimated by simulation in part (b) to the profit calculation in part (a). The average profit from the simulation is greater than the profit computed in part (a) The average profit from the simulation is less than the profit computed in part (a). Explain why they differ. Since the demand is being modeled as a normal random variable, the sample mean profit will always tend to be higher than the true mean profit. Profit is limited by the production quantity, so higher than average demand does not correspond to higher profits, but lower demand will lead to lower profits. Profit is limited by the production quantity, so lower than average demand does not correspond to lower profits, but higher demand will lead to higher profits. Since the demand is being modeled as a normal random variable, the sample mean profit will always tend to be lower than the true mean profit. quantity. Run your simulation with these two production quantities. (Use at least 1,000 trials. Round your answers to the nearest integer.) What is the mean profit (in dollars) associated with 50,000 units? $ What is the mean profit (in dollars) associated with 70,000 units? $ (e) In addition to mean profit, what other factors should FTC consider in determining a production quantity? (Select all that apply.) probability of a loss profit standard deviation probability of a shortage gut feeling stock market Fresh Toy Co. \begin{tabular}{|r|r|l|l|l|} \hline Simulation Trial & Demand & Net Profit & & Summary Statistics \\ \hline 1 & & & Mean Net Profit \\ \hline 2 & 3 & & HDIV/0! \\ \hline 4 & & & \\ \hline 5 & St. Dev. Net Profit \\ \hline 6 & & & \\ \hline 7 & & & \\ \hline 8 & & & \\ \hline 9 & & & \\ \hline 10 & & & \\ \hline 11 & & & \\ \hline 12 & & & & \\ \hline 13 & & & \\ \hline 14 & & & \\ \hline 15 & & & \\ \hline 16 & & & \\ \hline 17 & & & \\ \hline 18 & & & \\ \hline 19 & & & \\ \hline \end{tabular}