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

question 42

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 absolute deviation obtained from the simulation results?

• A) $10,893
• B) $3,476
• C) $7,443
• D) $5,885

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Definitions:

Gastrocnemius

A major muscle in the calf of the leg, involved in walking, running, and jumping.

Soleus

A powerful muscle in the calf of the leg that is involved in standing and walking, lying beneath the gastrocnemius muscle.

Sternocleidomastoid

The sternocleidomastoid is a muscle in the neck that runs from the sternum and clavicle to the mastoid process of the temporal bone, involved in head movement.

Orbicularis Oculi

A circular muscle that surrounds the eyelid, allowing it to close or blink.