Use the Information Below to Answer the Following Question(s) We Assume That the Production (Demand) Volume Is Normally Distributed

question 31

Multiple Choice

Use the information below to answer the following question(s) . Consider the following spreadsheet for an outsourcing decision model. $\begin{array}{|l|c|c|}\hline & \text { A } & \text { B } \\\hline 1 & \text { OutsourcingDecision Model } & \\\hline 2 & & \\\hline 3 & \text { Data } & \\\hline 4 & & \\\hline 5 & \text { Manufactured in-house } & \\\hline 6 & \text { Fixed cost } & \$ 60,000 \\\hline 7 & \text { Unit variable cost } & \$ 130 \\\hline 8 & & \\\hline 9 & \text { Purchased from supplier } & \\\hline 10 & \text { Unit cost } & \$ 165 \\\hline 11 & & \\\hline 12 & \text { Demand volume } & 1,000 \\\hline 13 & \\\hline 14 & \text { Model } \\\hline 15 & \\\hline 16 & \text { Total manufacturing cost } \\\hline 17 & \text { Total purchased cost } \\\hline 18 & \\\hline 19 & \text { Difference } \\\hline 20 & \text { Decision } \\\hline\end{array}$ We assume that the production (demand) volume is normally distributed with a mean of 1,000 and a standard deviation of 100. For the unit cost, select the triangular distribution. It has a minimum value of $150, most likely value of $165, and a maximum value of $190. The number of trials per simulation is equal to 5,000 at a Sim. Random Seed of 1. Run the simulation and answer the following question(s) using the Risk Solver Platform.
-What is the value of mean obtained from the simulation results? [Hint: Choose the nearest answer]

• A) $18,385
• B) $21,608
• C) $14,894
• D) $23,946

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Definitions:

Accurate Inferences

The process of drawing reliable conclusions from data and evidence with a high degree of precision.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect exists between specific populations, or parameters, in the context of hypothesis testing.

Relationship

The way in which two or more concepts, objects, or people are connected, or the state of being connected.

Sample Size

Sample size refers to the number of observations or individuals taken from a population to be used in a statistical analysis. The size of the sample can significantly impact the reliability and validity of the research findings.