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Inventory Management Problem Simkin's hardware stoce selis the ke model electric dill. Oaly demand for the drili a reatively low but subject to some variabilty.

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Inventory Management Problem Simkin's hardware stoce selis the ke model electric dill. Oaly demand for the drili a reatively low but subject to some variabilty. Over the past 300 dan, Aarry Simkin tas observed the demand frequency shown beiow. He converts this histonical frequency inte a probatility datribution for the variable daily demand. (Aho thown in the table below] When Simkin places an order to repleniah his invertory of drilk the time betwen whes he places an order and when it is received (ie the lead timelis a probablstic variable. Based on the poat 100 ordeci. Simkia has found that lead time felowas a discrete unilom dritibut on betinees one and thre dim? He currenthy has 7 Ace drilts in stock and there are ne orden due: Simkin wants to lofentify the order. quantity, Q, and reorder point, , that will heip hint reduce his total monthly costs. The total cest indudes the following thrie components a fred order cost, a holding cont and a stockost cont. Fimkin estimates that the faed cest of placire an order with ha Nce dril yopiler is 520 . The cont of holding a dnll in slock is $0.02 per dril per doy. Fach time Smain o urable to satisfy a derand (ei he has a stockout the customer bers the doil elie where, and simitin loses the cale. He estimates that ge cost of a stokcout in 56 per dril. Aasme that the thop operates 25 days each month on avenge Note that there are two decision variables (orider quantity, Q and receder point, af and tao probatistic cemponents (demand and lead time) is Simkin's imeftory preblem. Using simulaton, we can try deferent (Qu) combinations to se which combination yelds the kewest total cost. d) Start with =10 and 2=55 cenerate a vimdstion of the problem. yalues? Prepare one excel spreadshet for the lont answer question and upload that on the bos

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