6. Using the generic profit model developed in the section Logic and Business Principles in Chapter 9 , develop a financial simulation model for a new product proposal and construct a distribution of profits under the following assumptions: Price is fixed at $1,000. Unit costs are unknown and follow the distribution.

Unit Cost Probability

$400 0.20

$600 0.40

$700 0.25

$800 0.15 Demand is also variable and follows the following distribution:

Demand Probability 120 0.25 140 0.50 160 0.25 Fixed costs are estimated to follow the following distribution:

Fixed Costs Probability

$45,000 0.20

$50,000 0.50

$55,000 0.30 Implement your model using Crystal Ball to determine the best production quantity to maximize the average profit. Would you conclude that this product is a good investment? (Data for this problem can be found in the Problem 6 worksheet in the Excel file Chapter 10 Problem Data. )