The Saki automobile dealer in the Minneapolis–St. Paul area orders the Saki sport compact, which gets 50 miles per gallon of gasoline, from the manufacturer in Japan. However, the dealer never knows for sure how many months it will take to receive an order once it is placed. It can take one, two, or three months with the following probabilities:
Months to Receive an Order Probability
1 ..........................0.30
2 ....................0.30
3 .......................0.20
1.00
The demand per month is given by the following distribution:
Demand per Month (cars) Probability
1 ................... 0.10
2 ................... 0.30
3 ................... 0.40
4 ................... 0.20
1.00
The dealer orders when the number of cars on the lot gets down to a certain level. In order to determine the appropriate level of cars to use as an indicator of when to order, the dealer needs to know how many cars will be demanded during the time required to receive an order. Simulate the demand for 30 orders, and compute the average number of cars demanded during the time required to receive an order. At what level of cars in stock should the dealer place an order?