(A) Use a Simulation Model to Help the Institute Decide

question 2

Essay

(A) Use a simulation model to help the institute decide how many violins they must reserve with the instrument company. Consider five different possible reservation quantities: 400, 500, 600, 700, 800. Which of these quantities yields the highest total revenue, net of instrument costs?
(B) Which simulation yields the largest median total revenue?
(C) Which simulation has the most risk as measured by spread or dispersion in the data? Please state clearly what statistic you used to answer this question.
(D) Are there any simulations in which there is at least a 1 in 20 (i.e., 5%) chance of getting a negative total revenue? Briefly explain in one sentence.
(E) For each simulation, what is the probability of exceeding $175,000 in total revenue (approximate these numbers as closely as possible from the data given in the above table). Please put your answer in the following table: (F) Considering your answers for (A) through (E), please state how many instruments you think should be reserved in advance and explain why.
(G) Suppose the institute is able to negotiate with the instrument company to reduce the cost for a violin from $500 to $350. Re-run the simulation model using the same reservation quantities (but with $350 for the unused instrument cost). Has the reservation quantity that yields the highest average revenue changed? If so, please explain why this has occurred.

Recognize the impact of generational influences on values and ethics.

Identify ethical challenges in international and domestic business scenarios.

Describe the steps companies can take to enhance corporate ethics.

Recognize the importance of well-defined core values in personal development.

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Definitions:

Consignor Ownership

Describes a situation where goods are given to another party (consignee) to sell, but the original party (consignor) retains ownership until the goods are sold.

Consignee

The party or entity that receives goods for sale, storage, or transfer but does not take ownership of those goods until they are sold.

LIFO Inventory Method

"Last-In, First-Out" is an accounting method for valuing inventory where the most recently produced items are recorded as sold first.

Physical Inventory

The process of counting all physical merchandise or stock in a business at a specific time to verify the quantities on hand.