Reference no: EM132260384

Do a simulation for a new proposed manufactured product using the following details … Create a simulation to determine if the company should be going forward with manufacturing the proposed new product. Base your recommendation on the simulation’s resulting probability that the company will lose money on this possible venture. Make each trial to include two years of profit/loss simulation. In the first year, allow Excel to randomly select the market size. The estimated market size is uniformly distributed between 130,000 and 190,000 units annually. In the second year, have your simulation apply a randomly selected annual market size growth rate. The estimated market size growth rate is uniformly distributed between 2 and 4 percent per year (applied in the 2nd year only) The selling price will be $285 per unit. The cost of labor is estimated to be uniformly distributed between $104 and $109 per unit. Let this be randomly selected each of the two years. In the first year, allow Excel to randomly select the company’s market share, then apply market share growth to year two. Market share is uniformly distributed between 7 and 10 percent of the market size. Market share growth is also uniformly distributed between 3 and 6 percent per year (applied only in year 2). Materials/Parts cost has been assigned the following probabilities and needs to be randomly selected each of the two years. … $134 per unit = 18%, $135 = 10%, $136 = 16%, $137 = 23%, $138 = 20%, and $139 = 13% The company expects to have an annual overhead fixed cost of $500,000. Have your simulation include 100 trials. Also include a “probability of loss” calculation based on the two year total profit/loss from each trial. Make a recommendation on whether the company should go forward with manufacturing the new product.