Quantative Methods for Business. Managerial and scientific report Best Bike Ltd. Simulation with Excel Cristal Ball.
Date Submitted: 05/05/2004 12:36:04
Category: / Science & Technology / Mathematics
Length: 9 pages (2394 words)
Category: / Science & Technology / Mathematics
Length: 9 pages (2394 words)
Table of contents.
Managerial Report
1.Introduction
BestBikes Ltd. designs, produces and markets a wide variety of bicycles. Currently it is evaluating two new product proposals that have reached the final planning stage, namely a road- and mountain bike. BestBikes Ltd. can only produce one of the two proposed bikes. BestBikes wants to select the bike with the highest return on investment (ROI) and wants to limit the amount of risk.
The calculation of the ROI …
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…Bike frequency chart
This graph is accompanied by the following statistics:
Table 8. Statistics Mountain Bike
6.3 Expected ROI
After evaluating the simulations it becomes clear that, when taking the variability of the various elements into account, an accurate estimation of the ROI for both bikes differs from the one initially calculated by the management of Best Bikes. The road bike will provide a ROI of approximately 17,67% and the mountain bike will provide a ROI of approximately 21,23%.
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