Daily demand for Webcor barbeques at Shaper Idea has the following probabilities
ID: 3323031 • Letter: D
Question
Daily demand for Webcor barbeques at Shaper Idea has the following probabilities distribution:
Orders are placed at the end of the day, and lead-time (in days) has the following probability distribution.
For example, an order placed on day 4 with a lead-time of 2 days will be delivered at the beginning of day 7. Sharper Idea currently has an inventory of 10 Webcor barbeques. Order costs are approximately $50 per order, and inventory holding costs are estimated to be $2 per barbeque per day. The company suffers a goodwill cost of $30 for each barbeque demanded when it is out of stock and the sale is lost.
Sharper Idea's policy is to reorder 10 barbeques when supply reaches 6 or less at the end of a day. Please conduct a 10-day simulation for this policy using the following random numbers and calculate the total cost with this policy.
1) Complete the following look-up tables for patient arrival distribution using numbers 01, 02, ..., 99, 100.
2) Use the following table to generate your simulation. Notice that you need to first design the table. You might not need all the columns.
3) What are the total costs for the simulations in Question 2?
Demand Probability 0 0.05 1 0.37 2 0.3 3 0.2 4 0.08Explanation / Answer
1. The look-up table for demand is as follows:
The look-up table for lead-time is as follows:
2. The simulation table is as follows:
As we can see from the above table,
Total Inventory holding cost = $ 106
Total order cost = $ 100
Loss of goodwill cost = $ 30
3. Total cost of the simulation = Total Inventory holding cost + order cost + loss of goodwill cost = $ 106 + $ 100 + $ 30 = $ 236
Demand Probability Random Number Interval 0 0.05 01-05 1 0.37 06-42 2 0.3 43-72 3 0.2 73-92 4 0.08 93-100Related Questions
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