User Account

All Pages

Find the average net profit

Assignment Help Operation Management
Reference no: EM132952210

A colleague recently approached you about investing in a start-up that has developed a doggie camera that tosses treats to your pet using a phone app. You are trying to determine whether or not you should invest in this trendy product that has recently hit the market. Recent estimates of the financial data for the doggie camera / treat tosser sales show the following information:

Units Sold Probability

3500 0.35
6000 0.45
9500 0.20

?Fixed costs for the production is Normally Distributed with a mean of $210,000 and a standard deviation of $35,000.

Variable cost is $29 per unit and the selling price is $89.

a) Set up this simulation in Excel and calculate the net profit for each trial. Run 25 trials of the simulation. Find the average net profit for the 25 trials.

b) Given the uncertainty in the demand and the fixed costs for this investment and the inherent risk in investing in this company, based on your analysis, is this a good investment, why or why not?

HINT: For each trial, you will need to simulate two random numbers -- one for units sold and one for fixed costs. You can either use the RAND() function or the Random Number Generators. Type your response to part (b) on your Excel sheet. Upload the completed Excel file here.

Reference no: EM132952210

Questions Cloud

Calculate the multi-factor productivity : Calculate the multi-factor productivity for this operation in fees generated per dollar of input.
Pros and cons of different online cheating : 1.How significant a problem is cheating at the university level? In addition to facts in the case, you should feel free to offer examples from your own experien
Occupational safety and health management system : Develop an effective Occupational Safety and Health management system and how to implement it
Discuss fbk options : - If FBK wants to try to negotiate for more time to complete the project, what completion deadline should FBK seek if the company desires a 95% chance of timely
Find the average net profit : A colleague recently approached you about investing in a start-up that has developed a doggie camera that tosses treats to your pet using a phone app. You are t
Find average utilization of the? three-teller service : You are the manager of a local bank where three tellers provide services to customers. On? average, each teller takes four minutes to serve a customer.
Confidence interval for the average level of total profit : The manager of an internet-based retailer, Moore's More, is trying to predict the revenue generated by each department in the next year. The manager has estimat
Establish goals for an organization : How would you measure whether your goals were successfully attained?
Find the different characteristics of group : The "new" workforce will be represented by and composed of several generations: Baby Boomers, Generation X, Millennials and Generation Z. What strategies will l

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd