Average holding cost and average loss in good will

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Reference no: EM132264611

Directions:Answer the below question in an excel spreadsheet. Please explain step by step and every formula used.

Question:

Abby’s candle shop sells candles. Abby would like to estimate her income and sales, she has collected data from the last two months. The cost of each candle is $1 and she sells them for $2.50 each. She receives her candles every day from her supplier, the supplier brings in 500 candles a day for Abby to sell. If Abby runs out of candles she estimates that an unhappy customer will cost her $0.50. If Abby has to keep the candles for the next day she has a holding cost of $0.25 per candle. The demand for candles is a uniform distribution of between 400 and 550 candles a day.

Simulate 100 days of sales, find the average income, the average holding cost and the average loss in good will.

Reference no: EM132264611

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