## MIS 665 Topic 2 Discussions GCU

### MIS 665 Topic 2 DQ 1

Consider the following scenario and address the questions that follow.

Suppose your company wanted to determine the amount of sales of a new SUV model, called *Lightning*. The sales estimate would be based on the overall demand of various SUV model types. Overall demand is assumed to be normally distributed with a mean of 3 million units and standard deviation of 500,000 units. The share of demand that *Lightning* will take is assumed to be 4%. After running 1,000 simulated scenarios, a 95% confidence interval was constructed for the expected sales of *Lightning* units sold with limits of 93,048 and 146,964.

- If 1,000 new simulated scenarios were run, would you get the exact result? Explain why.
- Would the results be more stable if you ran 2,000 runs? Explain why.
- Is there a number of simulations that can be run so that the results do not change if you re-ran the simulations? Explain.

### MIS 665 Topic 2 DQ 2

Reconsider the scenario presented in DQ 1 and address the questions that follow.

Suppose your company wanted to determine the amount of sales of a new SUV model, called *Lightning*. The sales estimate would be based on the overall demand of various SUV model types. Overall demand is assumed to be normally distributed with a mean of 3 million units and standard deviation of 500,000 units. The share of demand that *Lightning* will take is assumed to be 4%. After running 1,000 simulated scenarios, a 95% confidence interval was constructed for the expected sales of *Lightning* units sold with limits of 93,048 and 146,964.

- If a mean of 6 million units was used in the simulation, how would the confidence interval change? Explain.
- How would the confidence interval change if a standard deviation of 250,000 was used? Explain.

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