Constructing a distribution of demand during reorder lead time is complicated if the lead time itself is variable. Consider the following distribution for a reorder point inventory system.
| Daily Demand |
|
Demand
|
Probability
|
|
0
|
0.1
|
|
1
|
0.2
|
|
2
|
0.3
|
|
3
|
0.4
|
| Lead Time |
|
Days
|
Probability
|
|
1
|
0.1
|
|
2
|
0.5
|
|
3
|
0.4
|
a. What is the range of possible demands during the variable lead time?
b. Using the Monte Carlo method and random numbers from Appendix B, simulate 10 demands during lead time that could be used to form a histogram.