9. Yield from Recruiting Seminars. To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3,500, and the commission for each new account opened is $5,000. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that he/she will open a new account.

a. Construct a spreadsheet model that correctly computes Gustin’s profit per seminar, given static values of the relevant parameters.

b. What type of random variable is the number of new accounts opened? (Hint:

Review Appendix 11.1 for descriptions of various types of probability distributions.)

c. Construct a simulation model to analyze the profitability of Gustin’s seminars.

Would you recommend that Gustin continue running the seminars?

d. How many attendees (in a multiple of five, i.e., 25, 30, 35, . . .) does Gustin need before a seminar’s average profit is greater than zero?