For a production-planning simulation, the sales volume of various products is re

Question

For a production-planning simulation, the sales volume of various products is required. The salesperson responsible for product XYZ-123 says that no fewer than 1000 units will be sold (because of existing contracts) and no more than 5000 units will be sold (because that is the entire market for the product). Given her experience, she believes that there is a 90% chance of selling more than 2000 units, a 25% chance of selling more than 3500 units, and only a 1% chance of selling more than 4500 units. (a) summarize this information into a Table showing the cumulative frequency probability distributions (b) Create a random-variate generator for the variable X which has an empirical continuous distribution (c) What are the values of X, given random numbers: .85, and .92

Explanation / Answer

a)

P(1000<X<2000) = 0.10

P(2000<X<3500) = P(X<3500) - P(X<2000) = 0.75-0.10 = 0.65

P(3500<X<4500) = P(X<4500) -P(X<3500) = 0.99-0.75 = 0.24

P(4500<X<4500) = 0.01

b)

c)

for 0.85, X = lies between 3500-4500

for 0.92, X lies between 3500-4500

X prob Cumulative Prob 1000-2000 0.1 0.1 2000-3500 0.65 0.75 3500-4500 0.24 0.99 4500-5000 0.01 1

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