Test

Task A

1. Average materials cost per unit $36.68

Material | Probability | Cumulative probability | Material cost per probability |

33 | 0.18 | 0.00 - 0.18 | 5.94 |

35 | 0.23 | 0.18 - 0.41 | 8.05 |

38 | 0.32 | 0.41 - 0.73 | 12.16 |

39 | 0.27 | 0.73 - 1.00 | 10.53 |

Total |   | 1 | 36.68 |

(33*0.18)+ (35*0.23) + (38*0.32) + (39*0.27) =36.68

2. Average Labor Cost Per Unit $24.66

Labor | Probability | Cumulative probability | Labor cost per probability |

22 | 0.12 | 0.00 - 0.12 | 2.64 |

23 | 0.18 | 0.12 - 0.30 | 4.14 |

24 | 0.22 | 0.30 - 0.52 | 5.28 |

25 | 0.28 | 0.52 - 0.80 | 7 |

28 | 0.20 | 0.80 - 1.00 | 5.6 |

Total | 1.00 |   | 24.66 |

(22*0.12)+ (23*0.18) + (24*0.22) + (25*0.28) + (28*0.20) =24.66

3. Average Utility Cost

Utilities | Probability | Cumulative probability | Utilities cost per probability |

3 | 0.26 | 0.00 - 0.26 | 0.78 |

4 | 0.43 | 0.26 - 0.69 | 1.72 |

6 | 0.31 | 0.69 - 1.00 | 1.86 |

Total | 1.00 |   | 4.36 |

(3*0.26) + (4*0.43) + (6*0.31) =4.3

After using the probability distribution, I calculated the total cost of the material, labor, and utilities. By using the simulation model, and given random number with in the 10 trail run.

Average total cost per unit is 65.60, and company want to markup $20.00 for each unit sold; therefore, the product should be sold at a price of $85.60.