Develop an Excel model for the below Monte Carlo simulation: Management of Product and Process Design

Acme Foods produces bags of mixed nuts by mixing different amounts of cashews, almonds, and peanuts. They make 1 kg bags of mixed nuts and sell them to grocery stores. Their cost of nuts varies from time to time. To make a 1 kg bag they add certain amounts of cashews and almonds and then top it up with peanuts until the weight is 1 kg. The following table shows the mean and variations in costs for the nuts: Cashews Almonds Peanuts Average Cost/kg $10.50 $7.00 $1.50 Standard Deviation 3.50 1.50 0.55 Each bag requires 250 g of cashews and 350 g of almonds, and the rest of the bag is filled with peanuts to reach exactly 1 kg. The process of dispensing Cashews and Almonds is not exact, and the following table shows the variations in dispensing these nuts. Cashews Almonds Weight (g) 250 350 Standard Deviation 35 40 The bags are sold for $7.00 each. As the result of the variations in cost/weight of the nuts the actual production cost of a 1 kg bag varies; therefore, the profit/loss per bag varies. Conduct a Monte Carlo analysis with 5,000 simulations and compute the expected profit/loss per 1 kg bag of mixed nuts and predict the percentage of the bags that lead to a loss. Note: This exercise requires two separate simulations, one for cost and one for weight of the nuts. Then, cost and profit per 1 kg bag can be simulated.