Refer to Problem 1.1. A sales forecast has been obtained that indicates that 4,000 units of the new product could be sold. This forecast is considered to be quite reliable, but there is considerable uncertainty about the accuracy of the estimates given for the leasing cost, the marginal production cost, and the unit revenue.
Use the Break-Even Analysis module in the Interactive Management Science Modules to perform what-if analysis on these estimates.
a. How large can the leasing cost be before this new product ceases to be profitable?
b. How large can the marginal production cost be before this new product ceases to be profitable?
c. How small can the unit revenue be before this new product ceases to be profitable?