A manufacturer of Bluetooth headphones examines the historical demand of its product and learns that the...

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A manufacturer of Bluetooth headphones examines the historical demand of its product and learns that the average monthly demand is about 3,160 headphones but varies between 2,660 and 3,910 headphones. Each pair of the headphones has a retail price of $70. The monthly fixed production cost ranges from $4,900 to $5,100, with an average of $9,200. The average variable cost of producing a pair of headphones is $46, but because the manufacturing process is not fully automated, the variable cost may vary between $37 and $42 per pair. Develop a risk analysis model to answer the following questions. a. What is the monthly profit from the Bluetooth headphones for the most likely, pessimistic, and optimistic scenarios? Scenario Worst case Most likely case Best case b. The company notices that during the holiday season in December, the demand tends to be higher than in other months. Historically, the demand in December is about 3,648 pairs on average, but also ranges from 2,845 to 4,567 pairs. What is the December profit for the most likely, pessimistic, and optimistic scenarios? Scenario Profit Worst case Most likely case Best case Profit A manufacturer of Bluetooth headphones examines the historical demand of its product and learns that the average monthly demand is about 3,160 headphones but varies between 2,660 and 3,910 headphones. Each pair of the headphones has a retail price of $70. The monthly fixed production cost ranges from $4,900 to $5,100, with an average of $9,200. The average variable cost of producing a pair of headphones is $46, but because the manufacturing process is not fully automated, the variable cost may vary between $37 and $42 per pair. Develop a risk analysis model to answer the following questions. a. What is the monthly profit from the Bluetooth headphones for the most likely, pessimistic, and optimistic scenarios? Scenario Worst case Most likely case Best case b. The company notices that during the holiday season in December, the demand tends to be higher than in other months. Historically, the demand in December is about 3,648 pairs on average, but also ranges from 2,845 to 4,567 pairs. What is the December profit for the most likely, pessimistic, and optimistic scenarios? Scenario Profit Worst case Most likely case Best case Profit

Answer rating: 100% (QA)

To develop a risk analysis model we need to consider the range of possible values for the variables involved and calculate the profit for each scenari... View the full answer