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The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. The selling price for the
The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. The selling price for the product will be $45 per unit. Probability distributions for the purchase cost, the labor cost, and the transportation cost are estimated as follows:
Procurement Cost ($) | Probability | Labor Cost ($) | Probability | Transportation Cost ($) | Probability |
10 | 0.25 | 20 | 0.10 | 3 | 0.75 |
11 | 0.45 | 22 | 0.25 | 5 | 0.25 |
12 | 0.30 | 24 | 0.35 | ||
25 | 0.30 |
a. Compute profit per unit for the base-case, worst-case, and best-case scenarios.
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