Whether the order quantity is optimal using @RISK. Introduction: Simulation model is the digital prototype of the physical model that helps to forecast the performance of the system or model in the real world.

Question

Your County has asked you to analyze the purchase of some dump trucks. Each truck wil cost $45,000 and have an operating and maintaining cost that starts at $15,000 the first year and increases by $ 2,000 per year. Assume the salvage value at the end of year is $9,000 and the interest rate is 12%. Estimate the equivalent annual cost of each truck.

Answer 1

Question

Chapter 12.5, Problem 12P

Summary Introduction

To determine: Whether the order quantity is optimal using @RISK.

Introduction: Simulation model is the digital prototype of the physical model that helps to forecast the performance of the system or model in the real world.

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Your County has asked you to analyze the purchase of some dump trucks. Each truck wil cost $45,000 and have an operating and maintaining cost that starts at $15,000 the first year and increases by $ 2,000 per year. Assume the salvage value at the end of year is $9,000 and the interest rate is 12%. Estimate the equivalent annual cost of each truck.

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