A manufacturer determines that he must receive 10% over production costs—or a minimum of $3 per unit—to make the manufacturing effort worthwhile. He also wants to set the maximum price for the product at $6 per unit, so that he can gain a sales advantage by offering the product for less than his nearest competitor. All values between $3 and $6 per unit have the same likelihood of being the actual product price.
The first step in selecting a probability distribution is matching the data with a distribution’s conditions. Checking the uniform distribution:
You would enter these values in Crystal Ball to produce a uniform distribution showing that all values from $3 to $6 occur with equal likelihood.