Problem 12-02 (Algorithmic) The management of Madeira Manufacturing Company considering the introduction of a new produc

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Problem 12 02 Algorithmic The Management Of Madeira Manufacturing Company Considering The Introduction Of A New Produc 1 (22.72 KiB) Viewed 13 times

Problem 12-02 (Algorithmic) The management of Madeira Manufacturing Company considering the introduction of a new product. The fixed cost to begin the production of the product is $26,000. The variable cost for the product is expected to be between $20 and $29 with a most likely value of $24 per unit. The product will sell for $55 per unit. Demand for the product is expected to range from 600 to 1600 units, with 900 units the most likely demand. Let c=variable cost per unit x = demand a. Develop the profit model for this product. Enter your answer in the form of an expression. (Example: (c+10)x+800) Profit = b. Provide the base-case, worst-case and best-case analyses. For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300) Base case: Profit = $ Worst case: Profit = $ Best case: Profit = $ c. Discuss why simulation would be desirable. A simulation the probability of each scenario.