Module 2 Assignment
This is an individual or group assignment (it is your decision). Groups cannot exceed more than TWO students, feel
free to pick your partner! Work on the following two problems. This assignment is worth 3 points. You will need at
least 2 hours to complete this assignment
Questions (You must use @Risk for Problem 1 and Excel built-in functions for Problem 2):
1. The revenues from ticket sales at CSU are significant, but the sale of food, beverages, and souvenirs has contributed greatly to the
overall profitability of the football program. One particular souvenir is the football program for each game. The demand of programs at
each game is described by the following probability distribution:
Number (In 1005) of Programs sold
23
2
25
26
27
Each program costs $0.75 to produce and sells for $2.00. Any programs that are not sold are donated to a recycling center and do not
produce any revenue. The number of programs to print per game(supply) follows a normal distribution with mean equal to 2,500 and
standard deviation equal to 50.
a. Simulate profit per game (size = 500).
. Compute the expected profit per game, median profit and the std deviation. Comment on the shape of the distribution
of simulated profit (by comparing mean versus median)
© What is the probability that profit per game will be less than $2,800?
2. Management of Toys R&U Company needs to decide whether to introduce a certain new novelty toy for the upcoming Christmas
season, after which it would be discontinued. The cost required to produce and market this toy would follow a normal distribution with
mean = $480,000 and standard deviation = $21,000 plus a variable cost that follows a continuous uniform distribution between $10 and
$15 per toy. The selling price is $37 per toy. How many units must they sell to
eak even (profit = 0)?
a. Simulate units required for
eak even, simulation size = 500. Then, compute the average, median, and standard deviation of
the number of simulated units to
eak even.
. Based on a, find the probability that numbers of units to
eak even is at least 19,000 but no more than 23,000.
c. Find the Sth and 95th percentiles for the simulated units to
eak even.
Requirements
+ Submission must include one excel workbook with all appropriate work and one word/pdf report (one
submission per group).
Walton Simulation Worksheet
Simulation of Walton's Bookstore using @RISK
Cost data Demand distribution - triangula
Unit cost $7.50 Minimum 100
Unit price $10.00 Most likely 175
Unit refund $2.50 Maximum 300
Decision variable
Order quantity 200
Simulated quantities
Demand Revenue Cost Left Over Refund Profit
ERROR:#NAME? ERROR:#NAME? $1,500 ERROR:#NAME? ERROR:#NAME? ERROR:#NAME?