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.