Question
Cik Suriani, the manager of a grocery store, orders milk from a dairy on a weekly basis. In her store, she has observed the following
Cik Suriani, the manager of a grocery store, orders milk from a dairy on a weekly basis. In her store, she has observed the following probability distribution for demand:
Demand (cases)/week | Probability |
18 19 20 21 22 | 0.17 0.18 0.30 0.20 0.15 |
One milk case costs the grocery RM 8 and selling price is RM 15 per case. The holding cost is RM 0.50/case and shortage cost is RM 1.00 per case. Simulate the business for 10 weeks. Use a weekly order size of 20 cases of milk and compute the average weekly profit for this order size. (For simulation purpose, use the random numbers: 59, 58, 52, 90, 30, 81, 69, 90, 45, and 50)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started