Exhibit 10-1 a Company Is in the Planning Phase of Constructing a Constructing

question 22

Essay

Exhibit 10-1
A company is in the planning phase of constructing a new production facility. It wants to build a simulation model for the economics of the facility, and one key uncertain input is the construction cost. For each of the scenarios in the questions below, choose an "appropriate" distribution, together with its parameters, and explain your choice.
-Refer to Exhibit 10-1.Engineering also believes the construction time will be from 5 to 9 months.However,they believe that 7 months is twice as likely as either 6 months or 8 months and that either of these latter possibilities is three times as likely as either 5 months or 9 months.