Suppose you are the marketing manager of a firm, and you plan to introduce a new product tothe market. You have to estimate the first year net profit, which depends on several variables• Sales volume (in units)• Price per unit• Unit cost. Fixed costsYour net profit isnet profit = sales volume x (price per unit-unit cost) - fixed costThe fixed cost is $120, 000, but other factors have some uncertainty. Based on your market research,there are equal chance that the market will be slow, ok, or hot.• Slow market the sales volume follows Poisson distribution with mean 50,000 units product, andthe average price per unit is $11.00●Ok market the sales volume follows Poisson distribution with mean 75,000 units product, theaverage price per unit is $10.00Hot market: the sales volume follows Poisson distribution with mean 100,000 units product, butthe competition is severe so you expect the average price per unit is just $8.00No matter what the market type is, your average unit cost follows a normal distribution N(6.5, 1²).Note that the unit cost is fixed for entire year, same for all units being sold. (Aka, you only need tosample one unit cost per Monte Carlo simulation).• Please run Monte Carlo simulations by Excel to sample possible net profit for the next year.Report the average net profit and draw a histogram of the net profits in the document of yoursolution. Also, please export the excel file to pdf file and submit your pdf file for the simulation.[Hint: Basically you need to generate three types of random variables: 1. sample one from the threepossible markets, use function =RANDBETWEEN(1,3) to generate a random index from 1 to 3.2. Draw sales volume from the Poisson distribution. 3. Draw average unit cost from the normaldistribution.]

Net profit = Sales volume ( price per unit - unit cost) - fixed costSales volume is 50,000 units for…

Suppose you are the marketing manager of a firm, and you plan to introduce a new product to the market. You have to estimate the first year net profit, which depends on several variables • Sales volume (in units) • Price per unit • Unit cost • Fixed costs Your net profit is net profit = sales volume × (price per unit-unit cost) - fixed cost The fixed cost is $120, 000, but other factors have some uncertainty. Based on your market research, there are equal chance that the market will be slow, ok, or hot.

Suppose you are the marketing manager of a firm, and you plan to introduce a new product to the market. You have to estimate the first year net profit, which depends on several variables • Sales volume (in units) • Price per unit • Unit cost • Fixed costs Your net profit is net profit = sales volume × (price per unit-unit cost) - fixed cost The fixed cost is $120, 000, but other factors have some uncertainty. Based on your market research, there are equal chance that the market will be slow, ok, or hot.

College Algebra

1st Edition

ISBN:9781938168383

Author:Jay Abramson

Publisher:Jay Abramson

Chapter7: Systems Of Equations And Inequalities

Section7.3: Systems Of Nonlinear Equations And Inequalities: Two Variables

Problem 4SE: If you graph a revenue and cost function, explain how to determine in what regions there is profit.

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