Simulation Case 16.1

Ski Jacket Production Solution
Ski Jacket Production Simulation
Using their employee estimates:
Variable Cost (C)

Selling Price (S)
Salvage value (V)
Fixed Cost (F)
14000
13000
14000
14000
15500
10500
Mean
Stdev
16000
8000
5000
11000
8000
15000
80
100
30
100,000
Qty to produce (Q)

Demand
Qty sold
Qty Overproduced
#ADDIN?
#ADDIN?
#ADDIN?
#ADDIN?
Revenue
Salvage Value
#ADDIN?
#ADDIN?
Variable Cost
Fixed Cost
#ADDIN?
100,000
Profit
#ADDIN?
12000
3497
Simulation Summary
Summary Information
Workbook Name
Book2
Number of Simulations
Number of Iterations
400
Number of Inputs
Number of Outputs
Sampling Type
Latin Hypercube
Simulation Start Time
11/29/2004 18:51
Simulation Stop Time
11/29/2004 18:51
Simulation Duration
00:00:02
Random Seed
5862
Output
Cell
Name
Sim
Minimum
Mean
Statistics
Maximum
x1
p1
x2
p2
Profit
G20
(366,216)
44,729
60,000
(66,869)
5%
60,000
95%
Profit
G20
(466,216)
56,908
100,000
(166,869)
5%
100,000
95%
Profit
G20
(516,216)
53,491
120,000
(216,869)
5%
120,000
95%
Input
Cell
Name
Sim
Minimum
Mean
Statistics
Maximum
x1
p1
x2
p2
Qty to produce ( G8
8000
8000
8000
8000
5%
8000
95%
Qty to produce ( G8
10000
10000
10000
10000
5%
10000
95%
Qty to produce ( G8
11000
11000
11000
11000
5%
11000
95%
Demand
G9
1911.1936035
12004.095911 23390.210938 6187.5893555
5% 17720.453125
95%
Demand
G9
1911.1936035
12004.095911 23390.210938 6187.5893555
5% 17720.453125
95%
Demand
G9
1911.1936035
12004.095911 23390.210938 6187.5893555
5% 17720.453125
95%
Page 3 of 6
Simulation Results for

Profit / G20
Summary Information
Distribution for Profit/G20
Workbook Name
Values in 10^ -5
3.500
Mean=42487.32
3.000
400
1
Number of Outputs
2.000
@RISK Student Version
1.500
For Academic Use Only
1.000
Sampling Type
Latin Hypercube
11/29/2004 18:45
11/29/2004 18:45
Simulation Duration
0.500
00:00:00
Random Seed
0.000
-350 -300 -250 -200 -150 -100
-50
50
100
Statistic
Values in Thousands
5%
-55.3647
90%
56
5%

1.000
Mean=42487.32
0.600

0.400
-250
-200
-150
-100
-50
50
100
Values in Thousands
5%
-55.3647
90%
56
5%
Value
5%
(55,365)
Maximum
56,000
10%
33,017
Mean
42,487
15%
56,000
Std Dev
50,137
20%
56,000
2513711227.926
25%
56,000
Skewness
-4.6920057949
30%
56,000
Kurtosis
27.4594585112
35%
56,000
Median
56,000
40%
56,000
Mode
56,000
45%
56,000
Left X
(55,365)
50%
56,000
Left P
5%
55%
56,000
56,000
60%
56,000
Right P
-300
Summary Statistics
Value
%tile
(342,925)
Right X
0.200
5862
Minimum
Variance
0.800
-350
Number of Inputs
2.500
0.000
Book2
95%
65%
56,000
Diff X
111,365
70%
56,000
Diff P
90%
75%
56,000
80%
56,000
Filter Min
85%
56,000
Filter Max
90%
56,000
95%
56,000
#Errors
#Filtered
(graph unavailable for this simulation and output)

Rank
#1
#2
#3
#4
#5
#6
#7
#8
#9
#10
#11
#12
#13
#14
#15
#16
Sensitivity
Name
Regr
Demand / $G$9
0.544
Corr
0.554
Simulation Results for

Profit / G20
Summary Information

Values in 10^ -5
1.400
Workbook Name
Mean=42524.88
1.200
Number of Outputs
0.600
0.400
Sampling Type
Latin Hypercube
11/29/2004 18:44
11/29/2004 18:44
Simulation Duration
0.200
00:00:00
Random Seed
0.000
-600
-400
-200
200
Statistic
Values in Thousands
5%
-265.3647
90%
5%
140
1.000
0.800

0.400
(265,365)
Maximum
140,000
10%
(176,983)
42,525
15%
(115,577)
142,266
20%
(66,552)
20239611867.56
25%
(26,708)
Skewness
-1.5988281109
30%
10,022
Kurtosis
5.0840607815
35%
44,087
Median
138,891
40%
77,120
Mode
140,000
45%
108,273
Left X
(265,365)
50%
138,891
Left P
5%
55%
140,000
140,000
60%
140,000
Right X
Right P
0.200
-400
-200
200
Values in Thousands
5%
-265.3647
90%
5%
140
Value
5%
Variance
Mean=42524.88
Summary Statistics
Value
%tile
(552,926)
Std Dev
5862
Minimum
Mean
-600
400
Number of Inputs
0.800
0.000
1.000
0.600
Book2
95%
65%
140,000
Diff X
405,365
70%
140,000
Diff P
90%
75%
140,000
80%
140,000
Filter Min
85%
140,000
Filter Max
90%
140,000
95%
140,000
#Errors
#Filtered
(graph unavailable for this simulation and output)

Rank
#1
#2
#3
#4
#5
#6
#7
#8
#9
#10
#11
#12
#13
#14
#15
#16
Sensitivity
Name
Regr
Demand / $G$9
0.855
Corr
0.935
Quantity
7800
8000
10000
11000
12000
Expected
Profit
42,487
44,729
56,908
53,491
42,525
5%
95%
(55,365)
(66,869)
(166,869)
(216,869)
(265,365)
56,000
60,000
100,000
120,000
140,000
The optimal production level is somewhere between 10,000 and 11,000.

Continue the process (i.e., use RiskSimTable again) to narrow the search range.
Optimal Production Level

200,000
150,000
100,000
Profit
50,000
0
(50,000)7800
8000
10000
(100,000)
(150,000)
(200,000)
(250,000)
(300,000)
Quantity
11000
12000

Simulation Case 16.1

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Simulation Case 16.1

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Ski Jacket Production Solution

Ski Jacket Production Simulation

Using their employee estimates:

Variable Cost (C)

Qty to produce (Q)

Simulation Start Time

Simulation Stop Time

12004.095911 23390.210938 6187.5893555

12004.095911 23390.210938 6187.5893555

12004.095911 23390.210938 6187.5893555

Simulation Results for

Distribution for Profit/G20

@RISK Student Version

For Academic Use Only

Simulation Start Time

Simulation Stop Time

-350 -300 -250 -200 -150 -100

Distribution for Profit/G20

@RISK Student Version

(graph unavailable for this simulation and output)

Simulation Results for

Distribution for Profit/G20

@RISK Student Version

For Academic Use Only

Simulation Start Time

Simulation Stop Time

@RISK Student Version

Distribution for Profit/G20

(graph unavailable for this simulation and output)

The optimal production level is somewhere between 10,000 and 11,000.

Optimal Production Level

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