CH%208_P1 - Figure 8.1 Simulation Output for Capacity Planning 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

CH%208_P1 - Figure 8.1 Simulation Output for Capacity...

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Figure 8.1 Simulation Output for Capacity Planning Page 1 Year Sales(thousands of units) Figure 8.1 1985 500 %age increase Prediction Error Est Interest rate 0.1 1986 544 500 1.09 541 1.01 Unit variable cost #NAME? 1987 593 544 1.09 588.61 1.01 Sales price 10 1988 672 593 1.13 641.62 1.05 Operating cost/unit plant capacity 1 1989 723 672 1.08 727.1 0.99 Fixed Cost slope per unit of cap 10 1990 757 723 1.05 782.28 0.97 Fixed Cost intercept 5000000 1991 848 757 1.12 819.07 1.04 Sales Price 10 1992 948 848 1.12 917.53 1.03 Variable cost slope per 100000 cap 0.1 1993 964 948 1.02 1025.73 0.94 Variable Cost intercept 6 Downside risk #NAME? 1994 1011 964 1.05 1043.05 0.97 Capacity #NAME? NPV #NAME? Avg %age increase 1.08 Mean Error 1 Demand Sales Sales Rev Variable Cost Fixed Cost Operating Cost Profit 1995 Std dev Error 0.04 1995 #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Forecast 1996 1996 #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? next year demand = last year demand*1.082*error 1997 1997 #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Plotting demand shows that constant percentage growth where error is normal mean 1 and std. dev.= 0.04 1998 1998 #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? is more realistic than constant growth in units 1999 1999 #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? so I believe this l gives a better indication 2000 2000 #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Downside risk minimized by capacity of 1.5 million 2001 2001 #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Expected Profit maximized by capacity of 1.7 million 2002 2002 #NAME? #NAME? #NAME? #NAME? #NAME? #NAME?

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