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The management of Madeira Computing is considering the introduction of a wearable electronic device

The management of Madeira Computing is considering the introduction of a wearable electronic device with functionality of a laptop and phone. The Fixed cost to launch this new product is $ 300,000. The variable cost for the product is expected to be between $160 and $240, with a most likely value of $200 per unit. The product will sell for $300 per unit. Demand estimates for the produce vary widely, ranging from 0 to 20,000 units, with an average of 4000 units.a) Compute profit for the base-case, worst case, and best-case scenarios.b) Assume the variable cost is an exponential random variable with a mean of 4000 units. Construct a simulation model to estimate the mean profit and the probability that the project will result in a loss.

 

Jul 23 2020 View more View Less

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