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08l021108_Chapter6

08l021108_Chapter6 - ISE310 Spring 2006 Probability Demand...

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ISE310 Spring 2006 05/12/2009 Probability Demand up 0.5 Probability Price up 0.5 SpotCost $1.20 Probability Demand down 0.5 Probability Price down 0.5 Lease $1.00 Probability staying the same 0 Probability staying the same 0 Revenue $1.22 % change 20% % change 10% Discount Rate 10% Revenue Cost Profit Spot NPV $(11,413.22) Spot 0.25 D=144 0.06 0.06 $175,680.00 $208,800.00 ($33,120.00) ($8,280.00) Revenue Cost Profit Expected Revenue Cost Profit Expected p=1.45 0.25 D=120 $146,400.00 $158,400.00 $(12,000.00) $(3,000.00) 0.25 D=144 0.06 0.13 $175,680.00 $171,360.00 $4,320.00 $1,080.00 p=1.32 PV of Per. 2 $(10,909.09) p=1.19 Total $(22,909.09) 0.25 D=96 0.06 0.13 $117,120.00 $139,200.00 ($22,080.00) ($5,520.00) p=1.45 0.25 D=120 $146,400.00 $129,600.00 $16,800.00 $4,200.00 0.25 D=96 0.06 0.25 $117,120.00 $114,240.00 $2,880.00 $720.00 D=100 $122,000.00 $120,000.00 $2,000.00 p=1.08 p=1.19 ($12,000.00) p= $1.20 0.25 D=144 0.06 p=1.19 0.25 D=80 $97,600.00 $105,600.00 $(8,000.00) $(2,000.00) 0.25 D=144 0.06 0.06 $175,680.00 $139,680.00 $36,000.00 $2,250.00 p=1.32 p=0.97 0.25 D=96 0.06 p=1.19 0.25 D=80 $97,600.00 $86,400.00 $11,200.00 $2,800.00 0.25 D=96 0.06 0.13 $117,120.00 $93,120.00 $24,000.00 $3,000.00 p=1.08 p=0.97 0.25 D=96 0.06 NPV= $(11,413.22) 1.00 p=1.45 $2,000.00 0.25 D=96 0.06 $1,818.18 p=1.19 ($15,231.40) 0.25 D=64 0.06 0.06 $78,080.00 $92,800.00 ($14,720.00) ($920.00) p=1.45 0.25 D=64 0.06 0.13 $78,080.00 $76,160.00 $1,920.00 $240.00 Simulation Approach Per 1 Per 2 Total p=1.19 Change in demand -20% 20% 0.25 D=96 0.06 Change in price -10% 10% p=1.19 Demand 80 96 0.25 D=96 0.06 Price $1.08 $1.19 p=0.97 Revenue $97,600.00 $117,120.00 0.25 D=64 0.06 Cost $86,400.00 $114,048.00 Average $4,121.25 p=1.19 Profit $11,200.00 $3,072.00 Std/ dev, $25,909.40 0.25 D=64 0.06 0.06 $78,080.00 $62,080.00 $16,000.00 $1,000.00 NPV $11,200.00 $2,792.73 $13,992.73 $49,265.45 Bin Frequency p=0.97 ($7,810.91) -42370.91 64 $19,592.73 -39414.9 0 $2,000.00 1 1 $(18,430.00) ($6,138.18) -36458.89 0 $20,989.09 -33502.88 0 ($9,207.27) -30546.86 63 ($5,207.27) -27590.85 50 ($5,207.27) -24634.84 0 ($21,498.18) -21678.83 0 $32,843.64 -18722.82 61 $13,992.73 -15766.81 0 ($42,370.91) -12810.79 0 ($32,247.27) -9854.78 0 ($9,207.27) -6898.77 120 ($5,207.27) -3942.76 136 $49,265.45 -986.75 0 $19,592.73 1969.26
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