Conduct a simulation of the Economic Order Quantity for Steeler Jerseys based on uncertain annual demand for the product Steel City knows for certain the ordering cost, Holding Rate, Cost Unit, Working Days Year, and Lead Timebut annual demand varies based on economic conditions and how well the team is performing The probabilities associated with various annual demand quantities are given in the table above With respect to the simulation, the owner has asked for the following Simulate at least 50 values for the Economic Order Quantity Present summary statistics for the simulation What is the average Economic Order Quantity What is the high value The low value The standard deviation For the average, high, and low Economic Order Quantities in part b) calculate the reorder point HINT Do not get hung up on trying to emulate section 14 6 in the text Part 2 is about exploring another way to deal with probabilistic demand Based on your simulation and what you know about the assumptions needed to make the Economic Order Quantity Model valid, is this a good inventory model for Steel City to use Explain why or why not Activit Probability Distribution for Steeler Jersey Annual Demand Annual Demand probability A 4 8 70,000 0 1 Warehouse Reorganization Project Plan Immediate Optimisti Most Pessimisti Predecessor c Likely C s) (Weeks) (Weeks) (Weeks) 6 18 TA L 16 D B, C 6 L 9 12 E CT 5 8 20 C 3 4 IF 4 H E, F L 10 I D, G, H 4 7 12 1 2 3 75,000 0 2 0 4 80,000 Salomo 85000 0 15 90,000 95000 0 1 0 05 Steel City Inventory Information Uncertain (see probability distribution Annual Demand for Widgets below) Ordering Cost 45 Annual Inventory Holding Rate 20 Cost per unit 65 275 Working Days Year Lead Time (days) Activit Probability Distribution for Steeler Jersey Annual Demand Annual Demand probability A 4 8 70,000 0 1 Warehouse Reorganization Project Plan Immediate Optimisti Most Pessimisti Predecessor c Likely C s) (Weeks) (Weeks) (Weeks) 6 18 TA L 16 D B, C 6 L 9 12 E CT 5 8 20 C 3 4 IF 4 H E, F L 10 I D, G, H 4 7 12 1 2 3 75,000 0 2 0 4 80,000 Salomo 85000 0 15 90,000 95000 0 1 0 05 Steel City Inventory Information Uncertain (see probability distribution Annual Demand for Widgets below) Ordering Cost 45 Annual Inventory Holding Rate 20 Cost per unit 65 275 Working Days Year Lead Time (days)

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Conduct a simulation of the Economic Order Quantity for Steeler Jerseys based on uncertain annual demand for the product. Steel City knows for certain the

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Conduct a simulation of the Economic Order Quantity for Steeler Jerseys based on uncertain annual demand for the product. Steel City knows for certain the ordering cost, Holding Rate, Cost/Unit, Working Days/Year, and Lead Timebut annual demand varies based on economic conditions and how well the team is performing. The probabilities associated with various annual demand quantities are given in the table above. With respect to the simulation, the owner has asked for the following:
1. Simulate at least 50 values for the Economic Order Quantity
2. Present summary statistics for the simulation. What is the average Economic Order Quantity? What is the high value? The low value? The standard deviation?
3. For the average, high, and low Economic Order Quantities in part b) calculate the reorder point.

HINT: Do not get hung up on trying to emulate section 14.6 in the text. Part 2 is about exploring another way to deal with probabilistic demand.

Based on your simulation and what you know about the assumptions needed to make the Economic Order Quantity Model valid, is this a good inventory model for Steel City to use? Explain why or why not.

Activit Probability Distribution for Steeler Jersey Annual Demand Annual Demand probability A 4 8 70,000 0.1 Warehouse Reorganization Project Plan Immediate Optimisti Most Pessimisti Predecessor c | Likely C s) (Weeks) (Weeks) (Weeks) 6 18 TA L 16 D B, C 6 L 9 12 | E CT 5 8 20 C 3 4 IF 4. H E, F L 10 I D, G, H 4 | 7 12 1 2 3 75,000 0.2 0.4 80,000 Salomo 85000 0.15 90,000 95000 0.1 0.05 Steel City Inventory Information Uncertain (see probability distribution Annual Demand for Widgets below) Ordering Cost 45 Annual Inventory Holding Rate % 20 Cost per unit 65 275 Working Days/Year Lead Time (days) Activit Probability Distribution for Steeler Jersey Annual Demand Annual Demand probability A 4 8 70,000 0.1 Warehouse Reorganization Project Plan Immediate Optimisti Most Pessimisti Predecessor c | Likely C s) (Weeks) (Weeks) (Weeks) 6 18 TA L 16 D B, C 6 L 9 12 | E CT 5 8 20 C 3 4 IF 4. H E, F L 10 I D, G, H 4 | 7 12 1 2 3 75,000 0.2 0.4 80,000 Salomo 85000 0.15 90,000 95000 0.1 0.05 Steel City Inventory Information Uncertain (see probability distribution Annual Demand for Widgets below) Ordering Cost 45 Annual Inventory Holding Rate % 20 Cost per unit 65 275 Working Days/Year Lead Time (days)