Scribd
Upload
4 views

CEO_Risk_Simulation_Model

The document analyzes a project with a mean profit of 570.98 and a high probability of favorable utility outcomes, indicating general satisfaction for the CEO. While there is a small risk of utility dropping below 0.804 and a 10.2% chance of significant losses, the likelihood of high profits is only 15.5%. The decision to proceed should weigh the modest expected gains against the potential risks involved.

Uploaded by

sajawal zaman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
4 views

CEO_Risk_Simulation_Model

The document analyzes a project with a mean profit of 570.98 and a high probability of favorable utility outcomes, indicating general satisfaction for the CEO. While there is a small risk of utility dropping below 0.804 and a 10.2% chance of significant losses, the likelihood of high profits is only 15.5%. The decision to proceed should weigh the modest expected gains against the potential risks involved.

Uploaded by

sajawal zaman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Trial Product Cost Market SizNet Profit Utility

1 2.166 #NAME? #NAME? #NAME?

The Date For utility is highly skewed to the right which shows utility is motly positiver
Also it denotes that ceo drives a high level of satisfaction from the profit outcomes
The 95% confidence interval shows that most utility values are above 0.804
The 5% worst-case scenario corresponds to a utility of 0.804 or lower
Our Mean Profit is 570.98
The CEO has a high probability of experiencing a utility close to 1, meaning the project is generally favorable.
There is a small probability (5%) of utility dropping below 0.804, which indicates potential risk.
Since very few outcomes result in negative utility, the CEO is unlikely to face significant dissatisfaction from the project.
The CEO faces a 10.2% probability of significant losses beyond -5,250.
The probability of high profit (>5,250) is 15.5%, meaning large gains are possible but not very frequent.
The majority of profits are small, with the average close to 570.98, indicating a modest expectation of gains.
The decision to develop the process should consider both the risk of losses and the low probability of large gains.
tion from the project.

of large gains.
Input Variable Ordering Cost 100
Month Comupter Cost 1200
Beginning Inventory Computer Price 2300
Demand (Normal Distribution) #NAME? Inventory Cost 12
Sales
Ending Inventory Reorder 100
Order Placed Ordered Quantity
Order Arrival
Revenue Revenue
Cost of Goods Sold (COGS) COGS
Ordering Cost/order 100 Ordering COST
Holding Cost 12 Inventory Cost
Monthly Profit Net Profit

Average Profit

Month Random Beginning Inventory Demand Sales Ending Inventory


0.27906 500 ### #NAME? #NAME?
Reorder decision Revenue Purchasing Cost Order Cost Holding Cost Profit

You might also like