The following task, in which you are asked to conduct a small number of simulation trials, should be done with manual calculations. Please be aware that the simulation results of such a small number of trials would not be sufficient for one to draw valid conclusions in a real situation. A large number of trials run on a computer would be necessary in order to arrive at a valid conclusion. Random numbers are provided in the attached template; these numbers are discrete, uniform, and between 1 and 100 inclusive.
Management has asked you to help estimate the average cost per unit to produce a new product so that they can project profits at different selling prices. You will conduct a Monte Carlo simulation for cost behavior using provided probabilistic data for the following cost estimates. Cost per unit for materials, labor, and utilities and their probability distributions are provided in the attached worksheet. In your calculations, round to the nearest cent.
A. Complete the attached “Simulation Template” by doing the following (responses should include two decimal places):
1. Determine the following costs correctly:
a. Average materials cost per unit
b. Average labor cost per unit
c. Average utilities cost per unit
d. Average total cost per unit
2. Show your random interval tables you used to correctly determine the costs in parts A1a–A1d.
a. Explain how you correctly used the random interval tables from part A2 to populate the “Simulation Template.”
Note: When the files opens, enter your name and student ID in the respective boxes so the task questions and problems will populate the worksheet. If the attached template does not open or is missing information, please contact Ecare for assistance with opening the file.
Note: Run 12 trials using the random numbers that are provided on the “Simulation Template” for each probability distribution. Use the random numbers in the exact sequence that they appear on the template for each cost.
B. Determine the selling price per unit that should be established for this product using your simulation results
1. Explain how you arrived at the selling price from part B.
Note: For your calculations in parts B and B1, assume that the company wants to realize an average markup of $20 on each unit sold.
C. When you use sources, include all in-text citations and references in APA format.
Note: To reduce unnecessary matches select ignore “small matches <20 words” and “bibliography”.
Note: For definitions of terms commonly used in the rubric, see the attached Rubric Terms.
Note: When using sources to support ideas and elements in a paper or project, the submission MUST include APA formatted in-text citations with a corresponding reference list for any direct quotes or paraphrasing. It is not necessary to list sources that were consulted if they have not been quoted or paraphrased in the text of the paper or project.