Answered: The revenue of a new product is $60 per…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

The revenue of a new product is $60 per unit. The production cost is given by a discrete distribution that: 40% chance that the cost is about $25 per unit, 40% chance that the cost is $30 per unit, and 20% chance that the cost is $35 per unit.

The labor cost per unit is normally distributed with mean $10 and standard deviation of $3. The demand is normally distributed with mean 14000 units and standard deviation of 3000 units.

For 1000 simulation trials, calculate the average profit and 95% confidence interval of the average profit.

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Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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