Use the profit model developed in Example 12.1 to implement a financial simulation model for...
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Finance
Use the profit model developed in Example 12.1 to implement a financial simulation model for a new product proposal and determine a distribution of profits using the discrete distributions below for the unit cost, demand, and fixed costs. Price is fixed at $1,000. Unit costs are unknown and follow the distribution
Unit Cost
Probability
$400
0.20
$600
0.40
$700
0.25
$800
0.15
Demand is also variable and follows the following distribution:
Demand
Probability
120
0.25
140
0.50
160
0.25
Fixed costs are estimated to follow the distribution
Fixed Costs
Probability
$45,000
0.20
$50,000
0.50
$55,000
0.30
Simulate this model for 50 trials and a production quantity of 140. What is the average profit?
I am in need of figuring how to do the 50 trials as well!
Use the profit model developed in Example 12.1 to implement a financial simulation model for a new product proposal and determine a distribution of profits using the discrete distributions below for the unit cost, demand, and fixed costs. Price is fixed at $1,000. Unit costs are unknown and follow the distribution
Unit Cost | Probability |
$400 | 0.20 |
$600 | 0.40 |
$700 | 0.25 |
$800 | 0.15 |
Demand is also variable and follows the following distribution:
Demand | Probability |
120 | 0.25 |
140 | 0.50 |
160 | 0.25 |
Fixed costs are estimated to follow the distribution
Fixed Costs | Probability |
$45,000 | 0.20 |
$50,000 | 0.50 |
$55,000 | 0.30 |
Simulate this model for 50 trials and a production quantity of 140. What is the average profit?
I am in need of figuring how to do the 50 trials as well!
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