Question: How is this done in Excel? For the Stochastic Model, use a Normal Distribution Curve, with the Mean being the Average Weekly Sales, and the

How is this done in Excel?

For the Stochastic Model, use a Normal Distribution Curve, with the Mean being the Average Weekly Sales, and the weekly Standard Deviation being $5,000. That is, all weekly sales will fall between the Average - 3 Standard Deviation and Average + 3 Standard Deviation. For example, if average weekly says is 100,000 then the 99% of weekly sales would fall between 85,000 and 115,000. Use the RANDBETWEEN function in excel to get this random sales number. To get discount per week, once again use a RAND () function to get a 0 (no loyalty card) or a 1 (loyalty card) and calculate the random discount based on loyalty card info. Calculate new sales, and difference in profit margin (The cost of the Loyalty Program). Now, since this is a stochastic model, you need to run it three times (use the F9 function to re-calculate spreadsheet). Make sure you tabulate each iteration so you can get a MEAN of the Cost of Loyalty Program.

Supermarket Calendar Week Average Sales in $ ('000s)
Average Weekly Sales over 5 years 1 $350.00
Normal Distribution 2 $360.00
Standard Deviation 5 3 $350.00
3Sigma Mininmum 44.5% of Sales 15 4 $380.00
3Sigma Maximum 44.5% of Sales 15 5 $370.00
Probability of Loyalty Card 0.63 6 $380.00
Discount Loyalty Card 0.04 7 $350.00
8 $380.00
9 $360.00
10 $330.00
11 $350.00
12 $390.00
13 $390.00
14 $380.00
15 $350.00
16 $340.00
17 $380.00
18 $400.00
19 $360.00
20 $510.00
21 $500.00
22 $380.00
23 $390.00
24 $370.00
25 $360.00
26 $370.00
27 $550.00
28 $480.00
29 $380.00
30 $350.00
31 $330.00
32 $340.00
33 $380.00
34 $360.00
35 $390.00
36 $340.00
37 $370.00
38 $350.00
39 $370.00
40 $330.00
41 $340.00
42 $320.00
43 $380.00
44 $360.00
45 $480.00
46 $510.00
47 $550.00
48 $550.00
49 $400.00
50 $500.00
51 $480.00
52 $550.00

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