Exhibit 12.5 The Following Questions Use the Information Below

question 45

Essay

Exhibit 12.5
The following questions use the information below.
The owner of Sal's Italian Restaurant wants to study the growth of his business using simulation. He is interested in simulating the number of customers and the amount ordered by customers each month. He currently serves 1000 customers per month and feels this can vary uniformly between a decrease of as much as 5% and an increase of up to 9%. The bill for each customer is a normally distributed random variable with a mean of $20 and a standard deviation of $5. The average order has been increasing steadily over the years and the owner expects the mean order will increase by 2% per month. You have created the following spreadsheet to simulate the problem.
-A simulation model was replicated 100 times yielding a mean of 82.59 with variance of 17.66. Of the 100 replications, 11 replications yielded an outcome over a value of 100. What is the 95% confidence interval on the proportion of simulations whose outcomes exceeded a value of 100?

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Definitions:

Recent Years

A term referring to the very latest past period, often without specifying the exact duration.

Defined Benefit Pension Plans

Retirement plans where an employer guarantees a specified pension amount to employees based on salary history and length of service.

Defined Contribution Plans

Retirement savings plans where the amount of the retirement benefits is determined by the contributions made by the employee and/or the employer.

Retirement Income

Money an individual receives after retiring from active employment, usually in the form of pensions, savings, or investments.