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494 CHAPTER 12 SIMULATION

Table 12.1 Probability Distribution for Direct Labour Cost per Unit
Direct Labour Cost per Unit Probability
E43 0.1
E44 0.2
E45 0.4
E46 0.2
E47 0.1

Figure 12.1 Uniform Probability Distribution for the Parts Cost Per Unit

0.05

80 90 100
Parts Cost per Unit

Parts Cost This cost depends upon the general economy, the overall demand for
parts, and the pricing policy of PortaCom’s parts suppliers. PortaCom believes that
the parts cost will range from E80 to E100 per unit and is described by the uniform
probability distribution shown in Figure 12.1. Costs per unit between E80 and E100
are equally likely.
First-Year Demand PortaCom believes that first-year demand is described by the
normal probability distribution shown in Figure 12.2. The mean or expected value of
first-year demand is 15 000 units. The standard deviation of 4500 units describes the
variability in the first-year demand.

Figure 12.2 Normal Probability Distribution of First-Year Demand

Standard Deviation
= 4500 units

15,000
Number of Units Sold

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