Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
The manager of an internet-based retailer, Moore's More, is trying to predict the revenue generated by each department in the next year. The manager has
The manager of an internet-based retailer, Moore's More, is trying to predict the revenue generated by each department in the next year. The manager has estimated the minimum and maximum growth rates possible for revenues in each department. The manager believes that any of the possible growth rates are equally likely to occur. These estimates are summarized in the table: DEPT. ELECTRONICS OFFICE SUPPLIES SPORTING GOODS TOYS HOBBY SUPPLIES CURRENT REVENUE $6,342,213 $1,203,231 $4,367,342 $3,543,537 $4,723,135 MIN. GROWTH RATE 2% -4% -2% -1% 4% MAX. GROWTH RATE 10% 5% 6% 8% 12% Currently, the total logistics costs are $5,321,776. The rate of change for logistics costs is Normally distributed with a mean of %2 with a standard deviation of %1. Create a spreadsheet to simulate the total profit that could occur in the coming year. Run 500 replications of the model and consider the following tasks: Construct a 95% confidence interval for the average level of total profit the manager could expect for the next year. b. According to your model, what are the chances that the total profit will be 5% larger than those in the next year. The manager of an internet-based retailer, Moore's More, is trying to predict the revenue generated by each department in the next year. The manager has estimated the minimum and maximum growth rates possible for revenues in each department. The manager believes that any of the possible growth rates are equally likely to occur. These estimates are summarized in the table: DEPT. ELECTRONICS OFFICE SUPPLIES SPORTING GOODS TOYS HOBBY SUPPLIES CURRENT REVENUE $6,342,213 $1,203,231 $4,367,342 $3,543,537 $4,723,135 MIN. GROWTH RATE 2% -4% -2% -1% 4% MAX. GROWTH RATE 10% 5% 6% 8% 12% Currently, the total logistics costs are $5,321,776. The rate of change for logistics costs is Normally distributed with a mean of %2 with a standard deviation of %1. Create a spreadsheet to simulate the total profit that could occur in the coming year. Run 500 replications of the model and consider the following tasks: Construct a 95% confidence interval for the average level of total profit the manager could expect for the next year. b. According to your model, what are the chances that the total profit will be 5% larger than those in the next year
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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