The production manager has decided to order a production run of Q=35000. Use simulation to find the
Question:
The production manager has decided to order a production run of Q=35000. Use simulation to find the distribution of profit given the following random inputs:
The fixed cost varies uniformly between 9 and 11 million dollars. The marginal cost is normally distributed with a mean of $1000 and a standard deviation of $200. The Sales Forecast is triangularly distributed with a minimum of 20000, a most likely value of 30,000 and an upper limit of 40000. All variables are continuous. Don't round to integer values.
Use 1000 iterations and find the mean and the 90th percentile of the profit distribution and the probability of a loss. Include the histogram of Profit in your response.
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe