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Question 2 . ( 2 . 5 points ) Virtual Reality Goggle Inventory. Galaxy Co . sells virtual reality ( VR ) goggles, particularly targeting
Question points Virtual Reality Goggle Inventory. Galaxy Co sells virtual reality VR goggles, particularly targeting customers who like to play video games. Galaxy procures each pair of goggles for $ from its supplier and sells each pair of goggles for $ Monthly demand for the VR goggles is a normal random variable with a mean of units and a standard deviation of units. At the beginning of each month, Galaxy orders enough goggles from its supplier to bring the inventory level up to goggles. If the monthly demand is less than Galaxy pays $ per pair of goggles that remains in inventory at the end of the month. If the monthly demand exceeds Galaxy sells only the pairs of goggles in stock. Galaxy assigns a shortage cost of $ for each unit of demand that is unsatisfied to represent a lossofgoodwill among its customers. Management would like to use a simulation model to analyze this situation. What is the average monthly profit resulting from its policy of stocking pairs of goggles at the beginning of each month? What is the proportion of months in which demand is completely satisfied? Use the simulation model to compare the profitability of monthly replenishment levels of and pairs of goggles.
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