Risk software, decision modeling help

Mojave Manufacturing Company (MMC) is considering the introduction of a new product. Before deciding, they would like you to do a risk analysis of the situation to assess whether the introduction of the new product is a good idea for the company. The (annual) fixed cost to begin production of the new product is $32,000. The variable cost for the product is uniformly distributed between $15 and $25 per unit. The product will sell for $50 per unit. Annual demand for the product is best described by a normal distribution with a mean of 1300 units and a standard deviation of 375 units. (Assume they produce exactly enough units to meet the annual demand.) 

a. Develop an @RISK simulation model and run it for 1,000 iterations. 

b. According to your simulation results what is the expected annual profit? 

c. According to the simulation results what is the probability of making a loss on this new product?

 d. Would you recommend MMC introduce this new product? Defend your decision using the simulation output data. 

e. How many iterations would you need to estimate expected annual profit for this new product within $50 for a 95 percent confidence level?

Cuban Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Mark Cuban, the president and owner of Cuban Investors, believes it can be sold for $160,000. The current property owner asked for bids and stated that the property will be sold for the highest bid in excess of $100,000. Two competitors will be submitting bids for the property. Cuban does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100,000 and $150,000. Cuban is considering submitting a bid of anywhere between $120000 and $150000 (in increments of $5000) for the property. He has consulted you to help him decide upon the “right” amount to bid for the property in order to maximize his expected profit. 

a. Let’s assume that Cuban decides to bid $120000. Build a simulation model corresponding to the above scenario and run it for 5000 iterations to answer parts b, c, and d. 

b. Based on your simulation model what is the probability that Cuban will be able to obtain the property with the bid of 120,000? 

c. Please provide a 95% confidence interval on your probability estimate from part b. 

d. What is the expected profit associated with the bid of $120,000?

 e. Rerun your simulation model (5000 iterations each time) using bid amounts of $125000, $130,000, $135,000, $140,000, $145,000 and $150,000. You can either run each simulation separately or use risksimtable as discussed in the live session. Based on these simulations which bid amount value would you recommend to Mark Cuban in order to maximize his expected profit?

Semester Papers
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.

error: Content is protected !!