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In AugusL the national coffee store We needs to decide how many holidayeditions insulated coffee mugs to order. Because the mugs are dated: those unsold
In AugusL the national coffee store We needs to decide how many holidayeditions insulated coffee mugs to order. Because the mugs are dated: those unsold by January 15 are considered a loss. These premium mugs sell for $25.95 and cost $935 each. W is uncertain of the demand- They believe the market demand is normally distributed with a mean of EDDIE} and a standard deviation of 34l Any unsold mugs are discounted and sold for $5 each. We are also interested in the opportunity costs 1which usually happen when demand is unmet- Assume We assigns $3.013 to each nnmehdemand insulated coffee mug as the additional opportunity cost due to future lost sales. For example: if EM ordered 551] mugs and TDD are demanded, 5D mugs are the unmet demand and $15G is the additional opportunity cost. Incorporate this additional cost into your model and attempt the following: a. Build a deterministic model in Excel. b. Simulate the model using [nale and plot a graph for the expected prot vs. order quantity along with the 5tlll percentile and 95d: percentiles prot points. The graph should be similar to the graph in the simulation example excel file [sheet I). Show the table that has been used to plot the graph. c. 'Nhich order policy {Quantity ordered] should be used as per the expectation alone and according to the variability depicted by the prot percentiles
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