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…


a. Compute profit per unit for the base-case, worst-case, and best-case scenarios.

b. Construct a simulation model to estimate the mean profit per unit.

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 $5. Use simulation to estimate the probability the profit per unit will be less than $5.

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