Perform a Simulation Assuming the Plant Will Be Designed to Meet

question 89

Essay

Perform a simulation assuming the plant will be designed to meet the expected demand. Use RISKSIMTABLE with a range of possible values to help the firm decide what the plant capacity should be. For each simulation what is the probability of exceeding $75,000 in NPV?

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Definitions:

Excavation

The process of removing soil, rock, or other materials from a site to form an open hole or cavity.

Purchase Discount

A reduction in price granted by a supplier to a buyer for early payment of an invoice.

Freight-In

The cost associated with transporting goods into a warehouse or to the buyer, often included in the inventory cost.