# Solved: You are looking to open up a cupcake shop in a high-traffic tourist area. In order to get

Assignment Deliverables, Part 1 1. Use a Monte Carlo simulation in MS Excel to simulate 1 month (26 days) of operation to calculate monthly profit. Replicate this simulation for 156 days, 312 days, 624 days, and 936 days to calculate average monthly profit….

You are looking to expand production to see if you can increase profits by baking 55, 60, 65, and 70 batches per day. On a separate tab of the same spreadsheet, use Scenario Manager to create a scenario summary for each batch

Assignment Deliverables, Part 2

Write a 2- to 3-page paper summarizing your findings along with a recommendation either to move forward with a formal business plan or to re-evaluate the business model. Be sure to address the following:

Based on your calculations, will the business hit the revenue goal of \$45,000 per month and be sustainable?

Which batch quantity would recommend

Can i get it in excel with the formuals showing.

Formulae: B18 =INDEX(A10:A15,MATCH(RAND(),C9:C15,1),1)

B19 =MIN(B18,B2)*B5-B2*B4+MAX(0,B2-B18)*B6

Monte Carlo simulation is following

Based on Simulation, Average daily profit = 1956.73

Monthly profit = 1956.73*26 = 50875

This is more than \$ 45000 , therefore the business will hit the revenue goal of \$ 45000 per month and it will be sustainable.

Doing the simulation for production batch of 45 results in highest profit. Therefore it is recommended to produce 45 batches.

Simulation for 156, 312, 624 and 936 can be conducted in the same manner as above. Number of Repetitions only need to be changed.