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(All answers were generated using 1,000 trials and native Excel functionality.) Galaxy Co. sells virtual reality (VR) goggles targeted to customers who like to
(All answers were generated using 1,000 trials and native Excel functionality.) Galaxy Co. sells virtual reality (VR) goggles targeted to customers who like to play video games. Galaxy procures each pair of goggles for $150 from its supplier and sells each pair of goggles for $300. Monthly demand for the VR goggles is a normal random variable with a mean of 140 units and a standard deviation of 35 units. At the beginning of each month, Galaxy orders enough goggles from its supplier to bring the inventory level up to 120 goggles. If the monthly demand is less than 120, Galaxy pays $20 per pair of goggles that remains in inventory at the end of the month. If the monthly demand exceeds 120, Galaxy sells only the 120 pairs of goggles in stock. Galaxy assigns a shortage cost of $40 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its customers. Management would like to use a simulation model to analyze this situation. The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Generate trials on a new worksheet. Download.spreadsheet galaxy-26666c.xlsx a. What is the average monthly profit resulting from its policy of stocking 120 routers at the beginning of each month? Round your answer to the nearest dollar 19200 b. What is the proportion of months in which demand is completely satisfied? Round your answer to the nearest whole number 34% c. Use the simulation model to compare the profitability of monthly replenishment levels of 105, 120, and 175 routes. Which monthly replenishment level maximizes profitability? 175 a. What is the average monthly profit resulting from its policy of stocking 120 routers at the beginning of each month? Round your answer to the nearest $ 19200 b. What is the proportion of months in which demand is completely satisfied? Round your answer to the nearest whole number. 34% c. Use the simulation model to compare the profitability of monthly replenishment levels of 105, 120, and 175 routers. Which monthly replenishment level maximizes profitability? 175 Use the corresponding 95% confidence intervals on the average profit to make your comparison. Round your answers to the nearest dollar Lower Bound: S Upper Bound: S Galaxy Co. Parameters Wholesale Price Retail Price Gross Profit per Unit $150 $300 $150 Holding Cost per Unit $20 Shortage Cost per Unit $40 Monthly Demand (normal) Mean 140 St. Dev 35.0
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