Product Launch : TopRank with @RISK

TopRank recognizes @RISK distribution functions and incorporates them in What-If analyses. This ability provides more flexibility and accuracy in
modeling the possible input values in your What-If analysis.

In this example, Jupiter Corporation is building a new model of 4-door sedan. Assuming that the car will generate sales for the next 5 years,
management has identified 5 factors that can influence the total revenue during that period. Several of these factors, listed below, have probability
distributions associated with them.

1.) Fixed Cost of Development

70% : 6 billion dollars
30% : 8 billion dollars

2.) Variable Production Cost

20% : $4,000
50% : $4,600
30% : $5,400

3.) Unit Sales

Assume the 1 Year Sales follow a distribution with
25% : 270,000 units
50% : 290,000 units
25% : 310,000 units
Assume that the Unit Sales for subsequent years are normally distributed with a mean at the previous years sales plus 5% and a standard deviation
of 1000 units. That is, Year2Sales = RiskNormal(Year1Sales * 1.05, 1000).

4.) Sale Price

The planned sale price is $10,000.

5.) Interest Rate

The estimated yearly interest rate is 10%.

During a What-If analysis, TopRank sees the probability distributions associated with these items and performs a smart sensitivity analysis using
them, stepping through the range of the distribution while spacing the steps such that each interval encompasses equal amounts of probability.

New Car Model Year 1 Year 2 Year 3 Year 4

Fixed Cost #ADDIN? #ADDIN? #ADDIN? #ADDIN?

Variable Cost/Unit #ADDIN? #ADDIN? #ADDIN? #ADDIN?

Sales (Units) #ADDIN? #ADDIN? #ADDIN? #ADDIN?

Sale Price #ADDIN? #ADDIN? #ADDIN? #ADDIN?

Interest Payment #ADDIN? #ADDIN? #ADDIN? #ADDIN?

Profit in Millions #ADDIN? #ADDIN? #ADDIN? #ADDIN?

Total Revenue in Millions #ADDIN?

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s for the next 5 years,

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Year 5

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