Using Monte Carlo Simulation to Optimize Card Production Decisions

This assignment focuses on using Monte Carlo simulation as a decision-making tool for a greeting card company. The problem involves determining the optimal number of Valentine's Day cards to produce, considering uncertain demand, production costs, selling prices, and disposal costs. The solution outlines a step-by-step process using Excel to simulate different production quantities and their corresponding profits. It includes creating a discrete probability distribution for demand, generating random numbers, using the VLOOKUP function to simulate demand, and calculating revenue, costs, and profit. The assignment highlights the use of the two-way data table function in Excel to analyze profit for different production levels and make informed decisions based on statistical analysis of the simulated results. The goal is to determine the production quantity that maximizes profitability, considering the uncertainties in demand.