Question

(Fill in the blanks)

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 $50 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	0.3	20	0.15	3	0.7
11	0.35	22	0.25	5	0.3
12	0.35	24	0.3
		25	0.3

a.) Compute profit per unit for the base-case, worst-case, and best-case.

Profit per unit for the base-case: $____________  

Profit per unit for the worst-case: $____________    

Profit per unit for the best-case: $____________  

b.) Construct a simulation model to estimate the mean profit per unit. If required, round your answer to the nearest cent.

Mean profit per unit = $_____________

c.) Why is the simulation approach to risk analysis preferable to generating a variety of what-if scenarios?

Answer 1

please like if it really helps you Thank you