Salemach Corporation is a start-up company that manufactures simple machines. It is interested in analyzing the profit from a new machine. It estimates that the selling price will be $150 per unit and the setup and advertising costs will total $250,000. The company estimates that the per unit raw material cost is uniformly distributed between $50 and $80 and are equally likely. The demand is normally distributed with a mean of 12,000 units and a standard deviation of 3000 units. The probability distribution for a range of labor cost per unit is given below. Labor Cost Probability
$52 0.05
$53 0.25
$54 0.40
Obtain estimates for the mean profit, maximum profit, minimum profit, and standard deviation of profit.
What is your estimate of the probability of a loss?