Reference no: EM132905385

1. Salemach Corporation is a start-up company that manufactures simple machines. It is interested in analyzing the profit from a new machine. It estimates that the selling price will be $150 per unit and the setup and advertising costs will total $250,000. The company estimates that the per unit raw material cost is uniformly distributed between $50 and $80 and are equally likely. The demand is normally distributed with a mean of 12,000 units and a standard deviation of 3,000 units. The probability distribution for a range of labor cost per unit is given below.

?Labor Cost. Probability

$52 0.10
$53 0.30
$54 0.35
$55 0.20
$56 0.05

?a. Obtain estimates for the mean profit, maximum profit, minimum profit, and standard deviation of profit.

b. What is your estimate of the probability of a loss?