# (All answers were generated using 1,000 trials and native Excel functionality.)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: ProcurementCost (\$)ProbabilityLaborCost (\$)ProbabilityTransportationCost (\$)Probability100.25200.1030.75110.45220.2550.25120.30240.35    250.30    (a)Construct a simulation model to estimate the average profit per unit. What is a 95% confidence interval around this average? Round your answers to two decimal places. Lower Bound: \$ Upper Bound: \$

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(All answers were generated using 1,000 trials and native Excel functionality.)

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:

 ProcurementCost (\$) Probability LaborCost (\$) Probability TransportationCost (\$) Probability 10 0.25 20 0.10 3 0.75 11 0.45 22 0.25 5 0.25 12 0.30 24 0.35 25 0.30

 (a) Construct a simulation model to estimate the average profit per unit. What is a 95% confidence interval around this average? Round your answers to two decimal places. Lower Bound: \$ Upper Bound: \$
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Step 1

Expected value of profit can be calculated by using formula: Selling price - Expected value of Procurement cost - Expected value of Labour cost - Expected value of Transportation cost

Step 2

Expected value of Profit = \$45 - \$11.05- \$23.4 - \$3.5 = \$ 7.05

Step 3

Confidence Interval can be calculated by using the formula shown below

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