Problem 12-14 (Algorithmic) The management of Madeira Manufacturing Company is considering the introduction of a new...
Problem 12-14 (Algorithmic)
The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $38,000. The variable cost for the product is uniformly distributed between $18 and $24 per unit. The product will sell for $58 per unit. Demand for the product is best described by a normal probability distribution with a mean of 1,100 units and a standard deviation of 300 units. Develop an Excel worksheet simulation for this problem. Use 500 simulation trials to answer the following questions:
- What is the mean profit for the simulation? Round your answer
to the nearest dollar.
Mean profit = $ - What is the probability that the project will result in a loss?
Recalculate the numerical value of probability in percent and then
round your answer to the nearest whole number.
Probability of Loss = %
Homework Answers
The simulation model is following:
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Problem 12-14 (Algorithmic) The management of Madeira Manufacturing Company is considering the introduction of a new...
The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed...
The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $35,000. The variable cost for the product is uniformly distributed between $17 and $23 per unit. The product will sell for $55 per unit. Demand for the product is best described by a normal probability distribution with a mean of 1,300 units and a standard deviation of 300 units. Develop an Excel worksheet simulation for...
The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed...
The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $27,000. The variable cost for the product is expected to be between $16 and $22 with a most likely value of $19 per unit. The product will sell for $35 per unit. Demand for the product is expected to range from 700 to 2000 units, with 1500 units the most likely demand. Let C =...
Problem 12-01 (Algorithmic) The management of Brinkley Corporation is interested in using simudla...
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Problem 12-01 (Algorithmic) 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 p...
Problem 12-01 (Algorithmic) 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 $45 per unit. Probability distributions for the purchase cost, the labor cost, and the transportation cost are estimated as follows: Transportation Labor Probability Cost ($) Probability 20 23 24 26 Procurement Cost ($) 10 Cost ($)Probability 0.72 0.2 0.25 0.35 0.2 0.35 0.25 0.4 0.28 13 a. Compute profit...
Problem 16-01 The management of Brinkley Corporation is interested in using simulation to estimate the profit...
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(Fill in the blanks) The management of Brinkley Corporation is interested in using simulation to estimate...
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Martin Company is considering the introduction of a new product. To determine a selling price, the...
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The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $35,000. The variable cost for the product is uniformly distributed between $17 and $23 per unit. The product will sell for $55 per unit. Demand for the product is best described by a normal probability distribution with a mean of 1,300 units and a standard deviation of 300 units. Develop an Excel worksheet simulation for...
The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $27,000. The variable cost for the product is expected to be between $16 and $22 with a most likely value of $19 per unit. The product will sell for $35 per unit. Demand for the product is expected to range from 700 to 2000 units, with 1500 units the most likely demand. Let C =...
Problem 12-01 (Algorithmic) 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 $45 per unit. Probability distributions for the purchase cost, the labor cost, and the transportation cost are estimated as follows: Transportation Labor Probability Cost ($) Probability 20 23 24 26 Procurement Cost ($) 10 Cost ($)Probability 0.72 0.2 0.25 0.35 0.2 0.35 0.25 0.4 0.28 13 a. Compute profit...
Problem 12-01 (Algorithmic) PortaCom manufactures notebook computers and related equipment. PortaCom's product design group developed a prototype for a new high-quality portable printer. The new printer features an innovative design and has the potential to capture a significant share of the portable printer market. Preliminary marketing and financial analyses provided the following selling price, first-year administrative cost, and first-year advertising cost: Selling price = $237 per unit Administrative cost = $300,000 Advertising cost = $700,000 In the simulation model for...
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