Exhibit 10-1 a Company Is in the Planning Phase of Constructing a Constructing

Essay

Exhibit 10-1
A company is in the planning phase of constructing a new production facility. It wants to build a simulation model for the economics of the facility, and one key uncertain input is the construction cost. For each of the scenarios in the questions below, choose an "appropriate" distribution, together with its parameters, and explain your choice.
-Refer to Exhibit 10-1.A little later on,management still believes the upper and lower bounds for the costs are $5M and $8M,but now they can also state that "we believe the most likely value is about $6.5M."