See how sensitive the results in Example 16.2 are to the following changes. For each part, make the change indicated, run the simulation, and comment on any differences between your outputs and the outputs in the example.
a. The cost of a new camera is increased to $300.
b. The warranty period is decreased to one year.
c. The terms of the warranty are changed. If the camera fails within one year, the customer gets a new camera for free. However, if the camera fails between 1 year and 1.5 years, the customer pays a pro rata share of the new camera, increasing linearly from 0 to full price. For example, if it fails at 1.2 years, which is 40% of the way from 1 to 1.5, the customer pays 40% of the full price.
d. The customer pays $50 up front for an extended warranty. This extends the warranty to three years. This extended warranty is just like the original, so that if the camera fails within three years, the customer gets a new camera for free.

  • CreatedApril 01, 2015
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