ICG, Inc has been struggling to launch a new product for the past 12 months.
Given the info below, what is the uncertainty distribution of the expected revenues of a new product?
The average price for the product can be minimally $10, most likely $12 and maximally $15.
Sales may be between 1,000 and 100,000 products, with most likely sales of 30,000.
Use the regular PERT distributions (see a description of the Pert distribution in @Risk) to determine:
1.Average expected total revenue
price
sales
total min
10
1000
10000
mean
12
30000
360000
max
15
100000
1500000
12.1666666666667
36833.3333333333
448138.888888889 =_xll.riskou
12.1667
36833.3333
448139.9
=_xll.riskpert(B13,B14,B15)=_xll.riskpert(C13,C14,C15)=_xll.riskoutput()+B16*C16
2.What is the probability that expected revenue will be less than $123,123
The probability is 5 %, that revenue will be less than $123,123 3.What is the probability that expected revenue will be higher than $800,000
The probability is 7.3%, that it will be greater than $800,000
Sampling Type: = Latin Hypercube
Initial Seed Fixed =123
RGN = Mersenne Twister
Multiple simulations All use same seeds
448138.888888889
static value =D16
10275
random value =RANDBETWEEN(D13,D15)
437863.888888889
difference =IF(B37>B38, B37-B38,B38-B37)
OBS: Simulation settings: 5,000 iterations
4. What is the difference between choosing static values or random values for distribution returns when a simu
