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

question 2

Multiple Choice

Use the information below to answer the following question(s) .
Consider the following spreadsheet for an outsourcing decision model.
$$\begin{array} { | l | l | l | } \hline 1 & \ { \text { A } } & \text { B } \\\hline 2 & \text { Outsourcing Decision Model } & \\\hline 3 & \text { Data } & \\\hline 4 & & \\\hline 5 & \text { Manufactured in-house } & \\\hline 6 & \text { Fixed cost } & \$ 60,000 \\\hline 7 & \text { Unit variable cost } & \$ 130 \\\hline 8 & & \\\hline 9 & \text { Purchased from supplier } & \\\hline 10 & \text { Unit cost } & \$ 180 \\\hline 11 & & \\\hline 12 & \text { Demand volume } & \$ 1,600 \\\hline 13 & & \\\hline 14 & \text { Model } & \\\hline 15 & & \\\hline 16 & \text { Total manufacturing cost } & \\\hline 17 & \text { Total purchased cost } & \\\hline 18 & & \\\hline 19 & \text { Difference } & \\\hline 20 & \text { Decision } & \\\hline\end{array}$$
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)$7,412
• D)$5,885

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Definitions:

Efficiency

Describes the extent to which time, effort, or cost is well-used for the intended task or purpose, often aiming for the maximum output from a given set of resources.

Indifference Curves

Graphical representations in economics showing combinations of goods among which a consumer is indifferent, meaning they have no preference for one combination over another.

Pareto Optimal

A state of allocation of resources from which it is impossible to reallocate to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off.

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming an additional unit of a good or service.