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Simulation

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Problem:

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

Text:
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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Solution Preview

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.

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Module 04 - Session Long Project

For the third and final run of this simulation, enter your decisions taking into account the changes in strategy you proposed in Module Three. Then in a 2-3 page paper discuss

Your company's performance in this run.

How it compares to the last run.

Why you think you did better or worse.

By this time you know the drill! Ground your analysis in solid business theory and principles, and support your conclusions with data.

Module 05 - Session Long Project

Now that you have run this simulation three times, I would like for you to evaluate the experience. First, I would like you to focus on the actual process you went through as you ran the simulation. Specifically, I'd like you to consider the following questions:

What did you learn from this exercise?

How did your strategies and decisions change?

What business theory(s), model(s), or analytical tools were most useful to you in determining your approach to the decisions you made?

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