Question: Suppose that a small candy store makes Valentine's Day gift boxes that cost $14.00 and sell for $21.00. In the past, at least 40 boxes
Suppose that a small candy store makes Valentine's Day gift boxes that cost $14.00 and sell for $21.00. In the past, at least 40 boxes have been sold by Valentine's Day, but the actual amount is uncertain, and the owner has often run short or made too many. After the holiday, any unsold boxes are discounted 50% and are eventually sold. Set up and run a Monte Carlo simulation assuming that demand is triangular with minimum value=40, maximum value=50, and most likely value=47. Find the distribution of profit for order quantities between 40 and 50 to identify the best order quantity. Use 20 simulation trials. Note:-Need to be solved in excel and with explanation what & which formulae is being use and why
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
