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A food vendor sells bunnychows (loaf of bread filled with curry) and is trying to maximise his profit. The number of bunnychows sold each day

A food vendor sells bunnychows (loaf of bread filled with curry) and is trying to maximise his profit. The number of bunnychows sold each day is a random variable and past data suggests the distribution of daily demand in Table 1 below.

Table 1: Demand Distribution

Daily Demand

Probability

60

0.1

70

0.15

80

0.35

90

0.25

100

0.15

It costs the vendor R15.00 to purchase a bunnychow from a local cook while he sells the bunny chow for R25.00. Any bunnychows that are not sold by the end of the day are donated freely to a food shelter while any unsatisfied demand is estimated to cost the vendor R5.00 in goodwill.

If the policy is to order a quantity from the local cook that is equal to theminimum of the previous two days' demand,determine the average daily profit of the food vendor by simulating this system for 10 days and comment on the effectiveness of the current ordering policy. The demand for bunnychows yesterday was 70, while demand for bunnychows the day before yesterday was 60. Use the random numbers provided in the table below.

Table 2: Random numbers - Read from left to right

0.393

0.087

0.292

0.573

0.796

0.653

0.813

0.294

0.963

0.963

0.346

0.859

0.224

0.573

0.813

0.561

0.528

0.485

0.172

0.863

0.502

0.778

0.551

0.355

0.748

0.074

0.200

0.138

0.310

0.068

0.352

0.560

0.396

0.892

0.099

0.482

0.022

0.577

0.749

0.513

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