The probablity of success of the “in-house” solution is uniformly distributed between 75% and 95%.

It is foolhardy to assume that such a determinstic solution as provided in Problem 3 could be realistic. In this questions we will build a solution under uncertainty using monte-carlo simulation. Consdier the following sources of variablity:

1 – The probablity of success of the “in-house” solution is uniformly distributed between 75% and 95%.

2 – The probability that the low budget marketing campaign will produce $2,000,000 in sales in uniformly distributed between 5% and 25%.

3 – The probability that the low budget marketing campaign will produce $4,000,000 in sales in uniformly distributed between 30% and 60%.

4 – The probability that the high budget marketing campaign will produce $4,000,000 in sales in uniformly distributed between 40% and 65%.

5 – The probability that the high budget marketing campaign will produce $5,000,000 in sales in uniformly distributed between 10% and 30%.

A) Provide a 1,000 iteration Monte-Carlo simulation for Problem 3 above. Upload your Excel File. BE SURE AND PROVIDE ALL RELEVANT SCREEN SHOTS IN YOUR ONE Word Document.

B) What is the distribution of each of the 5 scenarios.

C) What is the probability that producing in house is favorable?

D) Comment on this technique.

Submit your work in a Word document to the Homework submission area. You will need to upload all the files containing your completed work at the same time.

Please follow the homework submission guidelines outlined in the Syllabus and submit your work by the Due Date provided in the Course Schedule.