Day Random No. Production Simulated data No.of cars waiting to be shipped No. of empty space on the boat 3 1 98 20 63 2 101 3 100 1 46 16 4 98 3 5 45 100 1 6 41 100 1 7 44 100 1 8 66 101 9 87 103 2 10 26 99 2 11 78 102 1 40 100 1 12 13 29 99 2 14 3 92 21 104 98 15 3 Total 6 18 Average no. of cars waiting to be shipped = 6/15 = 0.40 per day Average no. of empty space on the boat = 18/15 = 1.2 per day v17 1 2 Illustration 17 A book store wishes to carry 'Ramayana in stock. Demand is probabilistic and replenishment of stock takes 2 days (i.e. if an order is placed on March 1. it will be delivered at the end of the day on March 3). The probabilities of demand are given below: Demand (daily) 0 3 Probability 0.05 0.10 0.30 0.45 0.10 Each time an order is placed, the store incurs an ordering cost of 10 per order. The store also incurs a carrying cost of 0.50 per book per day. The inventory carrying cost in calculated on the basis of stock at the end of each day. The manager of the bookstore wishes to compare two options for his inventory decision. A. Order 5 books when the inventory at the beginning of the day plus order outstanding is less than 8 books. B. Order 8 books when the inventory at the beginning of the day plus order outstanding is less than 8. Currently (beginning Ist day) the store has a stock of 8 books plus 6 books ordered two days ago and expected to arrive next day. Using Monte-Carlo Simulation for 10 cycles, recommend, which option the manager, should choose. The two digit random numbers are given below: 89 34 34 70 63 61 81 39 16 13 73