The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product The

Question

The management of Brinkley Corporation 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 Probability distributions for the purchase cost the labor cost and the transportation cost are estimated as follows Procurement Cost 10 11 12 Probability Labor Cost Probability Cost 0 25 0 45 0 3 20 22 24 25 Profit per unit for best case 0 1 0 25 Mean profit per unit 0 35 Transportation 0 3 3 a Compute profit per unit for base case worst case and best case Profit per unit for base case Profit per unit for worst case 5 b Construct a simulation model to estimate the mean profit per unit If required round your answer to the nearest cent Probability 0 75 0 25 c Why is the simulation approach to risk analysis preferable to generating a variety of what if scenarios d Management believes that the project may not be sustainable if the profit per unit is less than 5 Use

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