Question
The financial analyst at Good Taste Candy Company has handed you her Monte Carlo simulation model for Blue Berry Exploding Delicious Gum. She is going
The financial analyst at Good Taste Candy Company has handed you her Monte Carlo simulation model for Blue Berry Exploding Delicious Gum. She is going on leave and you are responsible for taking the model and using it to determine what level of production would be the most profitable for the new Everlasting Awesome Chocolate Peanut Butter Crisp. You have been given the following information:
Probability of Demand distribution:
Demand | Probability |
10000 | 15.00% |
250000 | 25.00% |
500000 | 30.00% |
800000 | 20.00% |
Number of Crisp made: 300,000
Cost per Crisp: 45 cents
Price per Crisp: $2.00
Disposal cost per unsold crisp: 7 cents
Build a Monte Carlo Simulation using this data in Excel and answer the following questions:
- What level of production should you choose?
- What level of production should you choose if the price cost up to $2.50 and the demand distribution changes to?
Demand | Probability |
10,000 | 15% |
250,000 | 45% |
500,000 | 35% |
800,000 | 5% |
Save your assignment as a Microsoft Excel document.
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