Figure $12\mathrm{.}1$

Excel WOr

In this section, we show how to construct a simulation model and conduct a risk analysis using native Excel functionality. The first step in constructing a spreadsheet simulation model is to express the relationship between the inputs and the outputs with appropriate formula logic. Figure $12\mathrm{.}1$ provides the formula and value view for the Sanotronics spreadsheet. Data on selling price per unit, administrative and advertising cost, direct labor cost per unit, parts cost per unit, and demand are in cells B$4$ to B$8.$ The profit calculation, corresponding to equation $(12\mathrm{.}1),$ is expressed in cell B$11$ using appropriate cell references and formula logic. For the values shown in Figure $12\mathrm{.}1,$ the spreadsheet model computes profit for the base$-$case scenario. By changing one or more values for the input parameters, the spreadsheet model can be used to conduct a manual what$-$if analysis $($e$.$g$.,$ the best$-$case and worst$-$case scenarios$).$

Figure $12\mathrm{.}1$ Excel Worksheet for Sanotronics

$\backslash$table$[[4,$A$,$B$,],[1,$Sanotronics,,,,$],[2,,,,,],[3,$Parameters,,,,$],[4,$Selling Prike per Unit,$249,4,$A$,],[5,$Administrative & Advertising Cost,$1000000,-,$Samotrintor $A,$B$],[6,$Direct Labor Cost per Unit,$45,2,$Sanotrunics,$],[7,$Parts Cost per Unit,$90,\frac{2}{3},,],[8,$Demand,$15000,,$Parameters,$],[9,,,4,$Selling Price per Unit,$$249\mathrm{.}00$sheet for Sanotronics

Of the $5$ parameters, the company is not certain about $3$ of the parameters. What are the $3$ parameters and what is the best Value for each parameter? What is the worst case value for each of these $3$ parameters? What is the best case value for each of the $3$ parameters.

Ch