Simulation and Risk Analysis Case Study

Part 1

Read Case Study Case 15.2 “Ebony Bath Soap” from the textbook, and then complete the following items.

For Questions 1 and 2 of the case, use the Palisade DecisionTools Excel software to set up a simulation model and run a simulation with 500 trials for the case. Ensure that all Palisade software output is included in your files and that only one Excel file is open when running a simulation. Use the “Topic 3 Case Study Template” file as a starting point. Hint: The RiskSimtable function was be helpful for running the simulations.
Respond to Question 3 as written in the problem. Ignore the confidence interval portion of the question.
Respond to Question 4 as written in the problem.
To receive full credit on the assignment, complete the following.

Ensure that the Palisade software output is included with your submission.
Ensure that Excel files include the associated cell functions and/or formulas if functions and/or formulas are used.
Include a written response to all narrative questions presented in the problem by placing it in the associated Excel file.
Include screenshots of all simulation distribution results for output variables.
Place each problem in its own Excel file. Ensure that your first and last name are in your Excel file names.
Part 2

In a 500-750-word summary to company management, address the following. Include relevant charts and graphs within your summary, as needed.

Describe the case specific business requirements and how they can be communicated across all levels of the organization.
Based on the simulation results, discuss the Annual Cost output statistical distributions. Assume that your audience as minimal background in statistics.
Discuss which Annual Cost output probability distribution has the most dispersion, and explain why this is so.
Explain the descriptive, predictive, and prescriptive analytics that have been used to formulate the solutions to the business needs.
Based on the Annual Cost output statistical distributions and other information gleaned from your analysis, discuss the specific prescribed course of action you would recommend to company management and justify your recommendations. Include discussion of how the proposed analytics solutions can optimize organizational performance and effectiveness.

Sample Solution