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The question is, "What is the uncertainty distribution of the expected revenues of this new product? "
Assumptions:
1 The average price I will sell this product for will be minimally $10, most likely $12 and maximally $15.
2 Sales will be between 1,000 and 100,000 products, with most likely sales of 30,000
3 To reflex this expert knowlegde, we will use the regular Triangular distributions (see a description of the Triangular distribution i
1 Average Price
2 Sales
3 Total revenue
$
Minimum
$10
Most likely
$12
Maximal
$15
Minimum
1,000
Most likely
30,000
Maximal
100,000
Price
Sales
30,000
12.00
Total revenue
360,000.00
Probability distributions
(we use here the Triangular distribution)
Input data
obability distributions
e use here the Triangular distribution)
Step 3: Tell Crystal Ball which cell are output (click on cell E14 and then click Crystal Ball button "Define Forecast"), and run Crystal Ball
1 Average Price
2 Sales
3 Total revenue
$
Minimum
$10
Most likely
$12
Maximal
$15
Minimum
1,000
Most likely
30,000
Maximal
100,000
Price
Sales
30,000
12.00
Total revenue
360,000.00
en click Crystal Ball button "Define Forecast"), and run Crystal Ball by clicking the "Play" (Start Simulation)
Output cell
Frequency
200
150
100
50
0
$23,802.53
$263,010.76
$502,219.00
$741,427.23
$980,635.46
Review:
1 Average expected total revenue is $536,643
2 There is a 10% probability that total revenues will be less than $220.664
3 There is a 10% probability that total revenues will be more than $906.970
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$199,221.90
$215,169.12
$231,116.33
$247,063.55
$263,010.76
$278,957.98
$294,905.19
$310,852.41
$326,799.63
$342,746.84
$358,694.06
$374,641.27
$390,588.49
$406,535.70
$422,482.92
$438,430.13
$454,377.35
$470,324.56
$486,271.78
$502,219.00
$518,166.21
$534,113.43
$550,060.64
$566,007.86
$581,955.07
$597,902.29
$613,849.50
$629,796.72
$645,743.94
$661,691.15
$677,638.37
$693,585.58
$709,532.80
$725,480.01
$741,427.23
$757,374.44
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$773,321.66
$789,268.87
$805,216.09
$821,163.31
$837,110.52
$853,057.74
$869,004.95
$884,952.17
$900,899.38
$916,846.60
$932,793.81
$948,741.03
$964,688.24
$980,635.46
$996,582.68
$1,012,529.89
$1,028,477.11
$1,044,424.32
$1,060,371.54
$1,076,318.75
$1,092,265.97
$1,108,213.18
$1,124,160.40
$1,140,107.62
$1,156,054.83
$1,172,002.05
$1,187,949.26
$1,203,896.48
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$773,321.66
$789,268.87
$805,216.09
$821,163.31
$837,110.52
$853,057.74
$869,004.95
$884,952.17
$900,899.38
$916,846.60
$932,793.81
$948,741.03
$964,688.24
$980,635.46
$996,582.68
$1,012,529.89
$1,028,477.11
$1,044,424.32
$1,060,371.54
$1,076,318.75
$1,092,265.97
$1,108,213.18
$1,124,160.40
$1,140,107.62
$1,156,054.83
$1,172,002.05
$1,187,949.26
$1,203,896.48
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