Question: Solve the following Make in-house or outsource decision model using Monte Carlo Simulation of Data Table. The production level has to be set equal to

Solve the following Make in-house or outsource decision model using Monte Carlo Simulation of Data Table. The production level has to be set equal to demand. Demand is assumed to follow a normal distribution of mean = 1200 and a standard deviation of 175. Make 1000 trials to simulate demand to find out the approximate probability to meet the demand through outsourcing, Data Manufactured in-house Fixed cost $50,000 Unit variable cost $135

Purchased from supplier Unit cost $180

Production volume

Model

Total manufacturing cost Total purchased cost

Cost difference Decision (Production/ Outsourcing)

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