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 49 dollars per unit. Probability distributions for the purchase cost, the labor cost, and the transportation cost are estimated as follows: Procurement Probability Labor Cost ($) Probability Transportation Cost ($) Probability
Cost ($)
11 0.25 22 0.15 4 0.65
12 0.35 24 0.25 5 0.35
13 0.4 25 0.35
27 0.25

Required:
a. Compute profit per unit for the base-case, worst-case, and best-case.
b. Construct a simulation model to estimate the mean profit per unit. If required, round your answer to the nearest cent.
c. Why is the simulation approach to risk analysis preferable to generating a variety of what-if scenarios?
d. Management believes the project may not be sustainable if the profit per unit is less than $11. Use simulation to estimate the probability the profit per unit will be less than $11.

When paul o’neill joined alcoa as ceo, he set a , that there would be zero workplace accidents. a lot of people in the organization thought this was impossible given how dangerous some aluminum-manufacturing jobs are, but alcoa’s safety record improved tremendously. as the board of governors of the american red cross considers planning, one option is to make strategic plans and then direct managers to align tactical and operational plans accordingly. another option is to have planning specialists managers across the organization make their own plans. why might this organization’s executives opt for the latter approach? check all that apply. (a) the environment is a dynamic one, and department and frontline managers can come up with more responsive plans than can central leadership. (b)resources will be better coordinated across the organization in support of the overall strategy.(c) senior leadership will have more control over the organization’s direction. (d)when managers come up with their own plans, they are likely to be more committed to following through on them.