In the existent world of continuous production systems, strong attention has been waged

to anonymous risk that probably generates significant apprehension. The forecast for net

present value is extremely important for any production plant. The objective of this paper

is to implement Monte Carlo simulation technique for perceiving the impact of risk and uncertainty

in prediction and forecasting company’s profitability. The production unit under

study is interested to make the initial investment by installing an additional spray dryer

plant. The expressive values acquied from the Monte Carlo technique established a range of

certain results. The expected net present value of the cash flow is $14,605, hence the frequency

chart outcomes confirmed that there is the highest level of certainty that the company

will achieve its target. To forecast the net present value for the next period, the results

confirmed that there are 50.73% chances of achieving the outcomes. Considering the minimum

and maximum values at 80% certainty level, it was observed that 80% chances exist

that expected outcomes will be between $5,830 and $22,587. The model’s sensitivity results

validated that cash inflows had a greater sensitivity level of 21.1% and the cash inflows for

the next year as 19.7%. Cumulative frequency distribution confirmed that the probability

to achieve a maximum value of $23,520 is 90 % and for the value of $6,244 it is about 10 %.

These validations suggested that controlling the expenditures, the company’s outflows can

also be controlled definitely.

JO - Management and Production Engineering Review L1 - http://so.czasopisma.pan.pl/Content/114821/PDF/9-269.pdf L2 - http://so.czasopisma.pan.pl/Content/114821 IS - No 4 KW - risk analysis KW - management KW - Monte Carlo simulation model KW - crystal ball package software KW - production uncertainty ER - A1 - Hussain, Zahid PB - Production Engineering Committee of the Polish Academy of Sciences, Polish Association for Production Management VL - vol. 10 JF - Management and Production Engineering Review T1 - Implementing Monte Carlo simulation model for revenue forecasting under the impact of risk and uncertainty UR - http://so.czasopisma.pan.pl/dlibra/docmetadata?id=114821 DOI - 10.24425/mper.2019.131448