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 0.25 0.40 0.35 to Labor Cost ($) 20 22 24 25 Probability Transportation Cost ($) Probability 0.15 0.20 0.35 0.30 3 5 0.75 0.25 (a) Construct a simulation model to estimate the average profit (in $) per unit and the variance of the profit per unit. (Use at least 1,000 trials. Round your answer to two decimal places.) average $ varlance What is a 95% confidence interval (In $) around this average? (Round your answers to two decimal places.) $ to $ (b) Management belleves that the project may not be sustainable if the profit per unit is less than $5. Use simulation to estimate the probability that the profit per unit will be less than $5. (Use at least 1,000 trials. Round your answer to three decimal places.) What is a 95% confidence interval around this proportion? (Round your answers to three decimal places.)
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 0.25 0.40 0.35 to Labor Cost ($) 20 22 24 25 Probability Transportation Cost ($) Probability 0.15 0.20 0.35 0.30 3 5 0.75 0.25 (a) Construct a simulation model to estimate the average profit (in $) per unit and the variance of the profit per unit. (Use at least 1,000 trials. Round your answer to two decimal places.) average $ varlance What is a 95% confidence interval (In $) around this average? (Round your answers to two decimal places.) $ to $ (b) Management belleves that the project may not be sustainable if the profit per unit is less than $5. Use simulation to estimate the probability that the profit per unit will be less than $5. (Use at least 1,000 trials. Round your answer to three decimal places.) What is a 95% confidence interval around this proportion? (Round your answers to three decimal places.)
Chapter9: Sequences, Probability And Counting Theory
Section9.7: Probability
Problem 1SE: What term is used to express the likelihood of an event occurring? Are there restrictions on its...
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Transcribed Image Text: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
0.25
0.40
0.35
to
Labor
Cost ($)
20
22
24
25
Probability Transportation Cost ($)
0.15
0.20
0.35
0.30
3
5
Probability
0.75
0.25
(a) Construct a simulation model to estimate the average profit (in $) per unit and the variance of the profit per unit. (Use at least 1,000 trials. Round your answer to two decimal places.)
average $
varlance
What is a 95% confidence interval (in $) around this average? (Round your answers to two decimal places.)
$
to $
(b) Management believes that the project may not be sustainable if the profit per unit is less than $5. Use simulation to estimate the probability that the profit per unit will be less than $5. (Use at
least 1,000 trials. Round your answer to three decimal places.)
What is a 95% confidence interval around this proportion? (Round your answers to three decimal places.)
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