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.

Uppose stanley's office supply purchases 50,000 boxes of pens every year. ordering costs are $100 per order and carrying costs are $0.40 per box. moreover, management has determined that the eoq is 5,000 boxes. the vendor now offers a quantity discount of $0.20 per box if the company buys pens in order sizes of 10,000 boxes. determine the before-tax benefit or loss of accepting the quantity discount. (assume the carrying cost remains at $0.40 per box whether or not the discount is taken.)

The following selected circumstances relate to pending lawsuits for erismus, inc. erismus’s fiscal year ends on december 31. financial statements are issued in march 2019. erismus prepares its financial statements according to u.s. gaap. required: indicate the amount erismus would record as an asset, liability, or not accrued in the following circumstances. 1. erismus is defending against a lawsuit. erismus's management believes the company has a slightly worse than 50/50 chance of eventually prevailing in court, and that if it loses, the judgment will be $1,000,000. 2. erismus is defending against a lawsuit. erismus's management believes it is probable that the company will lose in court. if it loses, management believes that damages could fall anywhere in the range of $2,000,000 to $4,000,000, with any damage in that range equally likely. 3. erismus is defending against a lawsuit. erismus's management believes it is probable that the company will lose in court. if it loses, management believes that damages will eventually be $5,000,000, with a present value of $3,500,000. 4. erismus is a plaintiff in a lawsuit. erismus's management believes it is probable that the company eventually will prevail in court, and that if it prevails, the judgment will be $1,000,000. 5. erismus is a plaintiff in a lawsuit. erismus’s management believes it is virtually certain that the company eventually will prevail in court, and that if it prevails, the judgment will be $500,000.

Aproduct has a demand of 4000 units per year. ordering cost is $20, and holding cost is $4 per unit per year. the cost-minimizing solution for this product is to order: ? a. 200 units per order. b. all 4000 units at one time. c. every 20 days. d. 10 times per year. e. none of the above