Implement a financial simulation model for a new product proposal and determine a distribution of profits using the provideddiscrete distributions for the unit cost, demand, and fixed costs. Price is fixed at $1,000. Simulate this model for 50 trials and aproduction quantity of 140. What is the average profit?Click here to view the discrete distributions.Click here to view a sample of 50 simulation trial results.Set up a lookup table for the unit cost.(Type integers or decimals. Do not round. Use ascending order.)Unit Cost Probability Lower Limit Upper Limit$4000.25$6000.40$7000.15$8000.200.250.250.65$400$600$700$800

Simulation is can be defined as the model that helps to find those liable for the plan and activity…

Answered: Implement a financial simulation model…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section: Chapter Questions

Problem 36P: Dilberts Department Store is trying to determine how many Hanson T-shirts to order. Currently the...

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Dilberts Department Store is trying to determine how many Hanson T-shirts to order. Currently the shirts are sold for 21, but at later dates the shirts will be offered at a 10% discount, then a 20% discount, then a 40% discount, then a 50% discount, and finally a 60% discount. Demand at the full price of 21 is believed to be normally distributed with mean 1800 and standard deviation 360. Demand at various discounts is assumed to be a multiple of full-price demand. These multiples, for discounts of 10%, 20%, 40%, 50%, and 60% are, respectively, 0.4, 0.7, 1.1, 2, and 50. For example, if full-price demand is 2500, then at a 10% discount customers would be willing to buy 1000 T-shirts. The unit cost of purchasing T-shirts depends on the number of T-shirts ordered, as shown in the file P10_36.xlsx. Use simulation to determine how many T-shirts the company should order. Model the problem so that the company first orders some quantity of T-shirts, then discounts deeper and deeper, as necessary, to sell all of the shirts.
The owner of a retail store that specializes in school supplies plans to buy TV ad time during the broadcast of Wheel of Fortune, a game show that has a rating of 20. It reaches 15,000 people in the primary target audience and a 30-second spot costs $500. What is the cost per thousand (CPM) of the show? 1) $33 2) $133 3) $30 4) $23 5) $750 Dravinur Dnn
Refer to the payoff table below of profits in ($000). Which decision alternative results from using the Conservative (Pessimestic) Decision Rule? PAYOFF TABLE High Demand Small Medium Large 35 300 550 -10 Moderate Demand 35 150 75 -10 Low Demand Do Nothing O A. Large O B. Do nothing OC. Medium O D. Small O E. Cannot be determined since relative frequencies are missing. 35 50 -45 -10
The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): Decision State of Nature Alternative Low Demand (S1) Medium Demand (S2) High Demand )S3) Manufacture, d(1) -20 40 100 Purchase, d(2) 10 45 70 The state-of-nature probabilities are P s1= 0.35, P s2= 0.35, and P s3= 0.30 Use expected value to recommend a decision.
Identify which type of analysis best fits each of the following descriptions. Requires the use of a computer Allows for probabilities to be assigned Includes the use of break-even analysis options; SCENARIO SENSITIVITY SIMULATION
ou have been pricing Samsung-Galaxy SmartWatch in several stores. Three stores have the identical price of $400. Each store charges 18 percent APR, has a 30-day grace period, and sends out bills on the first of the month. On further investigation, you find that store A calculates the finance charge by using the average daily balance method, store B uses the adjusted balance method, and store C using the previous balance method. Assume you purchased the SmartWatch on May 5 and made a $100 payment on June 15. What will the finance charge for June be if you made your purchase from store A? From store B? From store C?
The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 Decision tree leading to market study/ prediction of favorable…
The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 Compute the probabilities by completing the table Sate of…
The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 A.Compute the probabilities by completing the table Sate of…
The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a.Use expected value to recommend a decision. b.Use EVPI to determine whether Gorman should attempt to obtain a better estimate of demand.
Use the below formula to calculate the CLV for the following: A manager of a cable company wants to determine if it is strategic to acquire the Brett family, by estimating their household-level CLV. The manager estimates that it will cost the company $80 (A) to get the Bretts’ to switch, and the Bretts’ will generate $150 profit each year (M), with a $30 annual marketing cost to retain them (C). The estimated retention rate (r) is 65%, and the current discount rate is 5%.(d) i) CLV= ii) Based on your calculation, are the Brett’s profitable to the cable company?
Determine the concept of Monte Carlo simulation and the steps to take after performing Monte Carlo simulation.

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