An electric vehicle company is debating whether to replace its original model, Model X, with a new model, Model Y, which would appeal to a younger audience. Whatever vehicle is chosen, it will be produced for the next four years, after which time a reevaluation will be necessary. Develop a four-year Monte Carlo simulation model using 5050 trials to recommend the best decision using a net present value discount rate of 44%. Click here to view the descriptions of the two models. LOADING... Click here to view a sample of 50 simulation trial results. LOADING... Question content area bottom Part 1 Set up a spreadsheet model and calculate the difference in the net present values in thousands of dollars (NPV) for producing Model X or producing Model Y using the means for uncertain values with normal distributions and the most likely values for uncertain values with triangular distributions. NPV(Model Y)minus−NPV(Model X)equals=$enter your response here thousand (Round to the nearest thousand dollars as needed.) Trial Difference1 -6941552 -1000053 -2562044 -7797445 -4121596 -2126347 -15666628 -11879959 -29537310 -16557311 -38645512 -139887313 -35295414 -76275915 -34802216 -10179617 65876418 -93792619 -99519720 -78368421 -3630722 4542823 -129038924 -88009725 -5642026 500227 -134142028 -20278729 -36563530 -40404931 -122990132 -75056733 13281934 -15241735 -121418236 36893337 -12224738 32134339 57625240 -93867941 -95664742 -62103843 -67080044 -70695945 41308846 -100443447 25756848 -42566549 -64478650 -983028

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 52P

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Question content area bottom

Part 1

Set up a spreadsheet model and calculate the difference in the net present values in thousands of dollars (NPV) for producing Model X or producing Model Y using the means for uncertain values with normal distributions and the most likely values for uncertain values with triangular distributions.

NPV(Model

Y)minus−NPV(Model

X)equals=$enter your response here

thousand

(Round to the nearest thousand dollars as needed.)

Trial Difference
1 -694155
2 -100005
3 -256204
4 -779744
5 -412159
6 -212634
7 -1566662
8 -1187995
9 -295373
10 -165573
11 -386455
12 -1398873
13 -352954
14 -762759
15 -348022
16 -101796
17 658764
18 -937926
19 -995197
20 -783684
21 -36307
22 45428
23 -1290389
24 -880097
25 -56420
26 5002
27 -1341420
28 -202787
29 -365635
30 -404049
31 -1229901
32 -750567
33 132819
34 -152417
35 -1214182
36 368933
37 -122247
38 321343
39 576252
40 -938679
41 -956647
42 -621038
43 -670800
44 -706959
45 413088
46 -1004434
47 257568
48 -425665
49 -644786
50 -983028

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