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Simulation Analysis

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Explain the following in the context of the simulation.

o Create a solution using strategic variables available to you to sustain the economic profits the firm can earn.
o What are some of the pricing strategies that you would recommend?
o What are some of the nonpricing strategies that you would recommend?
o What kind of innovations would you propose to sustain the organization's uniqueness?

The simulation is based on you becoming CEO of Quasar Computers. Quasar has pioneered an all-opyical notebook computer. You will have to make decisions on operational and business strategies in a wide variety of market conditions.

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o Create a solution using strategic variables available to you to sustain the economic profits the firm can earn.
Since Quasar Computers has been able to secure a patent for three years, it means it has established a monopoly for a period of three years. The strategy that Quasar Computers should use is that it should attempt to recoup the research and development costs that it has incurred. In addition, it should invest the cash flow into fresh research so that there are more innovative products in the pipeline and are ready to be launched at the end of the three years.
o What are some of the pricing strategies that you would recommend?
Since, Quasar Computers is a monopoly for a period of three years it can set prices. in a monopoly the price has to be set at a level ...

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Finance Question about Scenario Analysis and Simulation Analysis

Which of the following statements is most correct?

a. Sensitivity analysis is a good way to measure market risk because it explicitly takes into account diversification effects.
b. One advantage of sensitivity analysis relative to scenario analysis is that it explicitly takes into account the probability of certain effects occurring, whereas scenario analysis does not consider probabilities.
c. Simulation analysis is a computerized version of scenario analysis that uses continuous probability distributions of the input variables.
d. Statements a and b are correct.
e. All of the statements above are correct.

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