Question
Galaxy Co. distributes wireless routers to Internet service providers. Galaxy procures each router from its supplier. Due to supply chain uncertainty, the supplier cannot offer
Galaxy Co. distributes wireless routers to Internet service providers. Galaxy procures each
router from its supplier. Due to supply chain uncertainty, the supplier cannot offer a fixed price
for it. Instead, the supplier offers a pricing scheme as shown in table below:
Price 607080
Probability 0.20.50.3
The selling price is a random variable uniformly distributed from 100 to 125. Monthly demand
for the router is a normal random variable with a mean of 100 units and a standard deviation of
20 units. At the beginning of each month, Galaxy orders enough routers from its supplier to
bring the inventory level up to 100 routers. If the monthly demand is less than 100, Galaxy pays
$15 per router that remains in inventory at the end of the month. If the monthly demand
exceeds 100, Galaxy assigns a shortage cost of $30 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.
a) Perform the simulation for 1000 times, what is the average monthly profit resulting
from its policy of stocking 100 routers at the beginning of each month? (3 Points)
b) What is the probability that this company's profit is more than 4000? Please help me set up the excel. I am a dumb guy so I need a step by step explanation as to what cell to enter what info
and I am sure Data analysis has to be used to run a regression possibly
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