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The appliance center sells and services several brands of major appliances. Past sales for a particular model of refrigerator have resulted in the following distribution for demand:

Demand / week Probability
0 .2
1 .4
2 .2
3 .15
4 .05

The lead time, in weeks, is described by the following distribution

Lead Time Probability
1 .15
2 .35
3 .5
the company has decided to order 10 units each time an order is placed. The holding cost is $1 per unit held at the end of each week. The stockout cost is $40 per week. The reorder point is when there is 2 units at the end of the week.

Simulate 10 weeks of operation assuming that there are 5 units in stock at the beginning of the simulation.

Determine weekly stockout and holding costs.

Formatted in Excel

Quantitative Analysis for Management, Render, Stair, and Hanna.11th Edition, Pearson Prentice-Hall, 2012. ISBN: 9780132149112.

problem 14-21
(page 567).

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Dear Student,

Please see 10 weeks simulation attached. Please keep in mind that as I ...

Solution Summary

The solution does a great job of answering the question. The solution is brief and concise and very easy to follow along. All the steps are clearly shown and Excel formulas are provided so that the student can answer similar questions in the future. It can be easily understood by anyone with a basic understanding of the topic. Overall, an excellent solution.