The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. Probability distributions for the material cost, the labor cost, and the transportation cost are shown below. T
hey plan to charge a price of $38 for the product. Run a simulation for 1000 replications calculating the profit per unit.
What do you expect their average profit to be?
What is the probability they will lose money?
What price would you set to ensure they make a profit 90% of the time?