New Car Problem Statement --------- ->>>>>>>> Input Data Statistics All the $ amounts are in $thousands Unit Selling Price $32 c) Unit Variable Cost Fixed Cost (Uniform Distribution) Lower bound $600.000 Upper bound $1,100,000 Lower Limit $850,000 Probability 0.15 0.35 0.30 0.20 Demand (Normal Distribution) Mean 120,000 Standard Dev 30.000 Sample Size Mean Profit Standard Deviation Minimum Profit Maximum Profit Count of Positive Profits Count of Profits >= 100 mil Probability of Positive Profit Probability of Profit >= 100 mil Upper Limit Cost per Unit $17 $19 $20 $22 d) Recommendation? Simulation Trials (1) ( (Selling price - Unit VC) Dmd - FC (8) ( (2) (3) (3) (7) (5) Unit Variable Cost Fixed Cost Demand Profit O Random Number 0.957 0.040 0.757 0.807 0.798 0.854 0.697 (4) Random Number 0.611 0.443 0.970 0.253 0.191 0.495 0.696 0.441 0.968 0.140 0.569 0.509 0.580 0.091 0.229 (6) Random Number 0.652 0.331 0.154 0.883 0.600 0.192 0.373 Trial 1 2 3 4 5 6 7 8 9 10 996 997 998 999 1000 GM is trying to decide whether to introduce a new car model. The selling price for the car will be $32,000. The fixed cost of developing the car is assumed to be uniformly distributed between $600 million and $1.1 billion. The demand for the car is described by a normal distribution with a mean of 120,000 units and a standard deviation of 30,000. The unit variable cost for the car is distributed as shown below. 0.796 0.909 0.461 0.175 0.075 0.951 0.936 0.245 0.976 0.785 0.568 0.855 0.985 Cost per Unit Probability $17,000 0.15 $19,000 0.35 $20,000 0.30 $22,000 0.20 0.777 0.421 0.936 O #DIV/0! #DIV/0! #DIV/0! #DIV/0! (a) Simulate the profit with 1000 trials. Express all the $ amounts including profit in $thousands. (b) What are the mean and standard deviation of the profit from the simulation? (c) GM is willing to introduce the car if there is at least 95% probability of making a profit AND at least 85% probability of making profit of at least $100 million. Compute these two probabilities and make a recommendation