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The owner of Carlo's Computers is planning a 7-day promotion (Sunday-Saturday) to launch a new PC called "PCLink1000." *The shop owner is pricing these PC's at \$675 each, and he buys them for \$425 each. *He must buy in bundles of 25 sets. *At the end of the promotion, the distributor will buy any unsold PC's back for \$350 each. *Demand is uncertain, but Carlo has gathered the following daily demand estimates
Computers Demanded Daily Probability

0 12%
1 22%
2 28%
3 22%
4 10%
5 6%

PROBLEM: How many TV's should Carlo buy so as to maximize profits?
We MUST use Excel's simulation/optimization capabilites. Or, we can use an add-in to Excel called Crystal Ball/OptQuest.

(see attachment).

#### Solution Preview

The owner of Carlo's Computers is planning a 7-day promotiuon (Sunday-Saturday) to launch a new PC called "PCLink1000." *The shop owner is pricing these PC's at \$675 each, and he buys them for \$425 each. *He must buy in bundles of 25 sets. *At the end of the promotion, the distributor will buy any unsold PC's back for \$350 each. *Demand is uncertain, but Carlo has gathered the following daily demand estimates (see attachment).

PROBLEM: How many TV's should Carlo buy so as to maximize profits???? We MUST use Excel's simulation/optimization capabilites. Or, we can use an add-in to Excel called Crystal Ball/OptQuest.

Step 1: Create the cumulative probability table and ...

#### Solution Summary

Uses Excel for simulation.

\$2.49