*You may find is useful to complete the first few rows, based on predetermined demand, to confirm that you have the following when you set min=2,500 and max=4,500. What do you think will happen to total ordering, holding and shortage costs as min and max are changed? For each of the following, make a hypothesis before using the simulation to test. 1. If min remains at 2,500 while max is increased, a. Total ordering costs will (increase/decrease) b. Total holding costs will (increase/decrease) c. Total shortage costs will (increase/decrease) d. Test your hypothesis by leaving min=2,500 and changing max to 5,000. Were your correct? Try, in your own words, to explain the reasons. 2. Set max to 4,500 again. What do you think will happen if max remains at 4,500 while min is increased? a. Total ordering costs will (increase/decrease) b. Total holding costs will (increase/decrease) c. Total shortage costs will (increase/decrease) d. Test your hypothesis by leaving max=4,500 and changing min to 3,000. Were your correct? 3. Experiment with different values of min and max and see how low you can get total costs. (Hint - Try to get total costs down to about $230,000 ). 4. [Time permitting]. Make a copy of your model worksheet. Modify the model to reflect a three (rather than two) day lead time. Using lab 7 with a two-day lead time (all original values), if we increased the min and max by 5% each (from original values), the total cost would be However, if we increased the min and max by 10% each (from original values), the total cost would be Lastly, if we increased the min and max by 15% each (from original values), the total cost would be Therefore, increasing the min and max by would be the best scenario to minimize the overall cost, while increasing the min and max by would be the worst scenario. *You may find is useful to complete the first few rows, based on predetermined demand, to confirm that you have the following when you set min=2,500 and max=4,500. What do you think will happen to total ordering, holding and shortage costs as min and max are changed? For each of the following, make a hypothesis before using the simulation to test. 1. If min remains at 2,500 while max is increased, a. Total ordering costs will (increase/decrease) b. Total holding costs will (increase/decrease) c. Total shortage costs will (increase/decrease) d. Test your hypothesis by leaving min=2,500 and changing max to 5,000. Were your correct? Try, in your own words, to explain the reasons. 2. Set max to 4,500 again. What do you think will happen if max remains at 4,500 while min is increased? a. Total ordering costs will (increase/decrease) b. Total holding costs will (increase/decrease) c. Total shortage costs will (increase/decrease) d. Test your hypothesis by leaving max=4,500 and changing min to 3,000. Were your correct? 3. Experiment with different values of min and max and see how low you can get total costs. (Hint - Try to get total costs down to about $230,000 ). 4. [Time permitting]. Make a copy of your model worksheet. Modify the model to reflect a three (rather than two) day lead time. Using lab 7 with a two-day lead time (all original values), if we increased the min and max by 5% each (from original values), the total cost would be However, if we increased the min and max by 10% each (from original values), the total cost would be Lastly, if we increased the min and max by 15% each (from original values), the total cost would be Therefore, increasing the min and max by would be the best scenario to minimize the overall cost, while increasing the min and max by would be the worst scenario