The management of a local company is interested in using simulation to estimate the profit per unit for a new product. The selling price for the product will be $45 per unit. The purchase cost, the labor cost, and the transportation cost vary but their probability distributions are estimated as follows: Procurement Cost ($) Labor Cost ($) Transportation Cost ($) Value Probability Value Probability Value Probability 10 0.25 20 0.10 0.75 11 0.45 22 0.25 0.25 12 0.30 24 0.35 25 0.30 A. Management believes that the project may not be sustainable if the profit per unit is less than $5 and wishes to use the simulation model to estimate the probability of the profit per unit being less than $5. Based on 10,000 iterations, the simulated probability that the profit per unit will be less than $5 is most likely between a. 0.01 and 0.03 b. 0.03 and 0.05 c. 0.05 and 0.07 d. 0.07 and 0.09 е. 0.09 and 0.11 Given the management's knowledge on the uncertainty of procurement cost, which of the following @Risk functions is appropriate to simulate possible procurement cost? a. =RiskDiscrete() =RiskNormal() =RiskUniform() d. =RiskPert() e. =RiskTriang() В. b. с. Based on 10,000 iterations, the mean profit per unit is most likely between a. 6.90 and 6.98 С. b. 7.00 and 7.08
The management of a local company is interested in using simulation to estimate the profit per unit for a new product. The selling price for the product will be $45 per unit. The purchase cost, the labor cost, and the transportation cost vary but their probability distributions are estimated as follows: Procurement Cost ($) Labor Cost ($) Transportation Cost ($) Value Probability Value Probability Value Probability 10 0.25 20 0.10 0.75 11 0.45 22 0.25 0.25 12 0.30 24 0.35 25 0.30 A. Management believes that the project may not be sustainable if the profit per unit is less than $5 and wishes to use the simulation model to estimate the probability of the profit per unit being less than $5. Based on 10,000 iterations, the simulated probability that the profit per unit will be less than $5 is most likely between a. 0.01 and 0.03 b. 0.03 and 0.05 c. 0.05 and 0.07 d. 0.07 and 0.09 е. 0.09 and 0.11 Given the management's knowledge on the uncertainty of procurement cost, which of the following @Risk functions is appropriate to simulate possible procurement cost? a. =RiskDiscrete() =RiskNormal() =RiskUniform() d. =RiskPert() e. =RiskTriang() В. b. с. Based on 10,000 iterations, the mean profit per unit is most likely between a. 6.90 and 6.98 С. b. 7.00 and 7.08
A First Course in Probability (10th Edition)
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ISBN:9780134753119
Author:Sheldon Ross
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Chapter1: Combinatorial Analysis
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Transcribed Image Text:The management of a local company is interested in using simulation to estimate the profit per unit for a new product.
The selling price for the product will be $45 per unit. The purchase cost, the labor cost, and the transportation cost vary
but their probability distributions are estimated as follows:
Procurement Cost ($)
Labor Cost ($)
Transportation Cost ($)
Value
Probability
Value
Probability
Value
Probability
10
0.25
20
0.10
3
0.75
11
0.45
22
0.25
0.25
12
0.30
24
0.35
25
0.30
A. Management believes that the project may not be sustainable if the profit per unit is less than $5 and wishes to use
the simulation model to estimate the probability of the profit per unit being less than $5. Based on 10,000
iterations, the simulated probability that the profit per unit will be less than $5 is most likely between
а.
0.01 and 0.03
b.
0.03 and 0.05
0.05 and 0.07
C.
0.07 and 0.09
d.
е.
0.09 and 0.11
Given the management's knowledge on the uncertainty of procurement cost, which of the following @Risk
functions is appropriate to simulate possible procurement cost?
=RiskDiscrete()
=RiskNormal()
=RiskUniform()
=RiskPert()
=RiskTriang()
В.
а.
b.
С.
d.
e.
С.
Based on 10,000 iterations, the mean profit per unit is most likely between
a.
6.90 and 6.98
b.
7.00 and 7.08
с.
7.10 and 7.18
d.
7.20 and 7.28
е.
7.30 and 7.38
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