Lucinda rameriz has a nice business on the side selling


Lucinda Rameriz has a nice business on the side, selling special events T-shirts for concerts, sporting events, and other occasions.

She is in the process of planning for her next major event, a concert by the band North Star that will be held in a large football stadium in a college town.

Unfortunately, her plans for ordering the T-shirts are complicated by the fact that the demand for them is very difficult to predict. Based on her assessments of the uncertainties associated with this decision, recommend how many T-shirts Lucinda should order. Your recommendation should be based on a Monte Carlo simulation model that develops a probability distribution for her net profit, and not simply a probability distribution for demand. Justify your answer based on your analysis.

Note that Exhibit 1 is provided to illustrate the information available to Lucinda when she makes her judgments. It is not necessary to do any formal analysis of this data.

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Financial Econometrics: Lucinda rameriz has a nice business on the side selling
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