In your spare time, you make decorative wood bowls and sell them at the annual c
ID: 3297954 • Letter: I
Question
In your spare time, you make decorative wood bowls and sell them at the annual community craft show.
• During the year you can make an average of 125 bowls with a standard deviation of 5. (normally distributed)
• The cost to make a bowl ranges between $1 to $3 dollars for materials. (discrete and uniformly distributed)
• At the craft show, you can sell at least 100 bowls and can range up to the numbers of bowls produced. (uniformly distributed)
• People at the craft show negotiate the selling price of your bowls and you find that at the end of the day, the average selling price ranged between $2, $3, $4 or $5 dollars each. (discrete and uniformly distributed)
• Excess bowls from each day are put in a box and sold in bulk at discount on Craigslist for an average of $0.7 per bowl with a standard deviation of $0.2. (normally distributed)
Use a Monte Carlo simulation to determine the following:
What is your expected profit (or loss), for this hobby?
What is the range of profit/loss based upon your analysis?
Explanation / Answer
https://www.dropbox.com/s/fkedb8o2i9j9ksw/Book2.xlsx?dl=0
Above is the link for excel simulation file