OR

OR

Pa 22: l . Assume that for the first day ol the simulation thau no etore. Question 12: A bookstore wishes to carry 'Ramayana' in stock. Demand is probabilistic and replenishment of stock takes 2 days (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 1 2 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 is 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 1. Order 5 books when the inventory at the end of the day plus orders outstanding is less than 8 books, B. Order 8 books when the inventory at the end of the day plus orders outstanding is less than 8. Currently (beginning of 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 digits random numbers are given below: 89, 34, 78, 63, 61, 81, 39, 16, 13, 73