Create a model to calculate the profits

Assignment Help Basic Computer Science

Reference no: EM133011129

Problem #1 (Scenario Manager for Newsvendor Problem - 12 points): Create a model to calculate the profits for a company making this product. The formula for profits is:

Profits = revenue - fixed costs - variable costs
Revenue = unit price * units sold
Variable costs = unit cost * quantity produced
Units sold (you need to figure out for yourself)

Unit price $60

Unit cost $35

Fixed cost $550,000

Quantity produced 60,000

Uncertain Demand

Case Probability Quantity

Recession 0.1 35,000

Poor growth 0.2 45,000

Base-case 0.4 55,000

Lucky 0.2 65,000

Boom 0.1 75,000

Using Scenario Manager, create a scenario summary of the demand quantity and profits. You will not receive full credit unless I see a single scenario summary report is generated by scenario manager.

Problem #2 (Excel Data Table - 12 points): Use the spreadsheet you have from above, create a data table in which the input variable to be changed is demand and show the resulting profit. You will not receive full credit unless I see that you have used a data table.
The values for demand are:

Demand Profit

40,000 ???

45,000 ???

50,000 ???

55,000 ???

60,000 ???

65,000 ???

70,000 ???

75,000 ???

Problem #3 (Excel Monte Carlo Simulation - 12 points): given the above model and data and the probabilities (from problem #3), run thirty (30) experiments for the uncertain demand and show the corresponding thirty values for the resulting profits. What is the expected value of the profit from your experiments?

Reference no: EM133011129

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