Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following is a deterministic model to estimate the profit that would be realized by opening a corner hot dog stand. Use this model to
The following is a deterministic model to estimate the profit that would be realized by opening a corner hot dog stand. Use this model to develop a Monte Carlo simulation to characterize the uncertainty of the contribution to profit. The distributions that you will use to characterize the uncertain quantities are listed below. Given your model, what is the probability that the Contribution to Profit is $800 or less? Distributions to use Normal with mean=100000 and std dev = 10000 Uniform between 25% and 35% ASSUMPTIONS: Market Size Market Proportion Price Variable Cost Fixed Cost (Cell C5) 100000 (C6) 25% (C7) $0.45 (C8) $0.20 (C9) $5,622 Triangle with min=$0.15, most likely =$0.20 and max=$0.25 Discrete with P($4,955)=10%, P($5,622)=80% and P($6,211)=10% FORCAST: Net Contribution to Profit $628.00 =C5*C6*(C7-C8)-C9 10% 20% 30% 40%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started