Problem 7: The work needs to be completed in Excel. Show all your work. Suppose you have an idea for a new product. The fixed costs are estimated at $500,500. You believe you can sell the item initially for $399, and that variable costs will run between $231 and $367 with $299 most likely. Suppose you believe that demand will be 1,000 for the worst case, 17,250 for the best case, and most likely will be 8,650. A) Determine the profit/loss for the most likely, worst, and best case scenarios. B) Suppose that demand follows a normal distribution with a mean of 8,650 and standard deviation of 3,700. Also, suppose that variable costs follow a uniform distribution with a minimum value of $231 and a maximum value of $367. Create an Excel model that determines the profit/loss. C) Now create an Excel data table for 1,000 simulations of your data model for determining the profit/loss. After you have completed the data table, determine the minimum, maximum, average, and standard deviation of the simulated values. Also, determine the probability that you will have a loss. D) Given your simulation results, would you pursue this new product idea? Why or why not?

Problem 7: The work needs to be completed in Excel. Show all your work. Suppose you have an idea for a new product. The fixed costs are estimated at $500,500. You believe you can sell the item initially for $399, and that variable costs will run between $231 and $367 with $299 most likely. Suppose you believe that demand will be 1,000 for the worst case, 17,250 for the best case, and most likely will be 8,650. A) Determine the profit/loss for the most likely, worst, and best case scenarios. B) Suppose that demand follows a normal distribution with a mean of 8,650 and standard deviation of 3,700. Also, suppose that variable costs follow a uniform distribution with a minimum value of $231 and a maximum value of $367. Create an Excel model that determines the profit/loss. C) Now create an Excel data table for 1,000 simulations of your data model for determining the profit/loss. After you have completed the data table, determine the minimum, maximum, average, and standard deviation of the simulated values. Also, determine the probability that you will have a loss. D) Given your simulation results, would you pursue this new product idea? Why or why not?

College Algebra (MindTap Course List)

12th Edition

ISBN:9781305652231

Author:R. David Gustafson, Jeff Hughes

Publisher:R. David Gustafson, Jeff Hughes

Chapter6: Linear Systems

Section6.8: Linear Programming

Problem 5SC: If during the following year it is predicted that each comedy skit will generate 30 thousand and...

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