Question: (All answers generated on the Analytic Solver Platform using 10,000 trials and random seed 1994.) The management of Madeira Manufacturing Company is considering the introduction

(All answers generated on the Analytic Solver Platform using 10,000 trials and random seed 1994.)

The management of Madeira Manufacturing Company is considering the introduction of a new product. The fixed cost to begin the production of the product is $30,000. The variable cost for the product is expected to be between $16 and $24, with a most likely value of $20 per unit. The product will sell for $50 per unit. Demand for the product is expected to range from 300 to 2,100 units, with 1,200 units the most likely.

(a)

Develop a what-if spreadsheet model computing profit for this product in the basecase, worst-case, and best-case scenarios.

If your answer is negative, use minus sign.

Best-case profit	$
Worst-case profit	$
Base-case profit	$

(b)

Discuss why the simulation would be appropriate for this situation. Would simulation be a preferable approach to analyze this situation? Why or why not?

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

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