Question: Use the profit model developed in Example 12.1 to implement a financial simulation model for a new product proposal and determine a distribution of profits

Use the profit model developed in Example 12.1 to implement a financial simulation model for a new product proposal and determine a distribution of profits using the discrete distributions below for the unit cost, demand, and fixed costs. Price is fixed at $1,000. Unit costs are unknown and follow the distribution

Unit Cost

Probability

$400

0.20

$600

0.40

$700

0.25

$800

0.15

Demand is also variable and follows the following distribution:

Demand

Probability

120

0.25

140

0.50

160

0.25

Fixed costs are estimated to follow the distribution

Fixed Costs

Probability

$45,000

0.20

$50,000

0.50

$55,000

0.30

Simulate this model for 50 trials and a production quantity of 140. What is the average profit?

I am in need of figuring how to do the 50 trials as well!

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