Problem 12-14 (Algorithmic)
The management of Madeira Manufacturing Company is consideringthe introduction of a new product. The fixed cost to begin theproduction of the product is $36,000. The variable cost for theproduct is uniformly distributed between $20 and $28 per unit. Theproduct will sell for $56 per unit. Demand for the product is bestdescribed by a normal probability distribution with a mean of 1,200units and a standard deviation of 100 units. Develop an Excelworksheet simulation for this problem. Use 500 simulation trials toanswer the following questions:
- What is the mean profit for the simulation? Round your answerto the nearest dollar.
Mean profit = $ ___ - What is the probability that the project will result in a loss?Recalculate the numerical value of probability in percent and thenround your answer to the nearest whole number.
Probability of Loss =____ %
