Rerun the new car simulation from Example 12.5 but now introduce uncertainty into the fixed development cost. Let it be triangularly distributed with parameters $1.2 billion, $1.3 billion, and $1.7...


Rerun the new car simulation from Example 12.5 but now introduce uncertainty into the fixed development cost. Let it be triangularly distributed with parameters $1.2 billion, $1.3 billion, and $1.7 billion. (You can check that the mean of this distribution is $1.4 billion, the same as the cost given in the example.) Comment on the differences between your outputs and those in the example. Would you say these differences are “important” for the company?



May 25, 2022
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