The Western Outfitter Store specializes in denim jeans. The variable cost of the jeans varies according to several factors, including the cost of the jeans from the distributor, labor costs, handling, packaging, and so on. Price also is a random variable that varies according to competitors’ prices. Sales volume also varies each month. The probability distributions for price, volume, and variable costs each month are as follows:
Sales Volume Probability
300 .............. 0.12
400 .............. 0.18
500 .............. 0.20
600 .............. 0.23
700 .............. 0.17
800 .............. 0.10
1.00
Price Probability
$22 ........... .0.07
23 ........... 0.16
24 ............ 0.24
25 ............ 0.25
26 ............. 0.18
27 .............. 0.10
1.00
Variable Cost Probability
$8 ........... 0.17
9 ............. 0.32
10 ........... 0.29
11 ........... 0.14
12 ........... 0.08
1.00
Fixed costs are $9000 per month for the store. Simulate 20 months of store sales and compute the probability the store will at least break even.