Manufacturer of laptop computers wishes to simulate profit

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Reference no: EM132257052

A manufacturer of laptop computers wishes to simulate profit per week.

On an Excel worksheet, perform the simulation using 1,000 trials.

The profit equation is: Z = VP – CF – VCV, where the symbols have the meanings given in the text. The assumptions are: ? Demand ( V ) is normally distributed with a mean of 1,250 computers and a standard deviation of 100 computers ? Price ( P ) is uniformly distributed from $700 to $850 per computer ? Fixed costs are ( CF ) are $200,000 per week ? Variable costs per computer sold ( CV ) follow this discrete distribution:

Cost:. ... $350...$450....$575...

Probability: .10 .... .60 .... .30

Use Excel to obtain the following statistics for your 1,000 simulation runs of Profit: mean, standard deviation, the 95% confidence interval for the true population mean profit, coefficient of variation (CV), profit margin (profit as % of revenue), probability of a loss, and probability of making breakeven or better. Report the probability numbers as decimal format to four decimal places. Attach the Excel results to your managerial report as follows:

1. Print the top of your Excel sheet adequate to show all input assumptions, your statistics, and the first 20 simulation trials.

2. Print simulation trials 980 through 1,000. In the narrative of the managerial report, discuss fully what you did, your assumptions, and the meaning of each of the statistics you generated.

Reference no: EM132257052

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