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    Managerial Science Excel Sheet

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    The questions are in red on the Excel sheet.

    Monthly Demand (Number of New sign customer sign ups) Percentage of a time demand level occurs
    1,000 5
    2,000 15
    3500 20
    5,000 30
    7,000 25
    9,000 5

    In addition to the historical demand, the company knows that the selling price per customer is a random value between $50 and 80$.
    The selling price is due to the different packages ordered by diffeent customers. The random value of the selling price has been traditionally determined
    within sun dish by a discrete uniform distribution.

    The monthly demand data shown is an average of the demand from the first six months after the new service is introduced
    The data about the percentage of time a specific demand level occurs is based on historical data over a number of observations
    The simulated monthly demand multiplied by the simulated selling price gives the montly revenue.
    Normally the company runs 200 replications in simulation models such as this one. The 200 replications are used to determine the average revenue and the
    standard deviation of revenue that is expected from a new service offering.

    It is important to note that in real life situations, it takes a significant amount of effort to collect data by examining various documents and interviewing different people, to develop
    assumptions for simlifying analysis and to present the data in an understandable form.

    Exhibit 4 demand forecast
    Use the specified historical demand data to simulate the demand for the new service. Use the Monte Carlo Method to determine the expected average monthly demand over the first 6 months of the service. Conduct 200 replications of the simulation model to determine your results.

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    Capacity Planning Data

    The company needs to plan for the capacity required to produce the new equipment for the satellite dish venture because the existing capacity is insufficient there are several options to add capacity: however, the selection depends on the market for the new service.
    The basic decision is to do one of the following to increase capacity:

    Build a new plant in Wisconsin
    Buy an existing plant in Indiana from a smaller company
    Subcontract the required capacity from available vendors
    Buy new equipment to boost the capacity of existing plants

    If the company undertakes the second option, it can engage the services of a survey company to narrow the search for a potential plant that can be bought.
    Of course, the decision depends on how the market for the new service turns out in the future. The company managers think the market can be predicted to turn in one of three ways, favorable, ...

    Solution Summary

    Managerial science excel sheets are examined.