Reference no: EM131032180
Question 1. EasyRent just started its DVD rental business. It charges $3 for overnight rental of new movies. If a customer is not able to rent a DVD, EasyRent offers three free rentals as compensation. The estimated cost of this compensation is $8. Recently, a new action movie is just about to be launched on DVD. According to historical data about action movies, the daily demand during the first month of release approximately satisfies the discrete probability distribution below:
|
Daily Demand
|
95
|
105
|
115
|
125
|
135
|
145
|
155
|
|
Probability
|
7%
|
10%
|
18%
|
30%
|
18%
|
10%
|
7%
|
EasyRent has to pay $60 per copy of DVD for right to rent out the movie. Considering the stock levels of 95, 100, 105, 110, 115, 120, 125, 130, 135, 140, 145, 150, and 155, the general manager has decided to use Monte Carlo simulation method to determine which stock level EasyRent should have in order to maximize EasyRent's expected profit during the first month (monthly profit = daily profit × 30 - total ordering cost).
Create a simulation model with Excel tools only, for example, using VLOOKUP,Data Table, but no @RISK, calculate expected profit based on simulation with 1,000 samples, and find out the best stock level.
Question 2. For the same problem as given in Question 1, build a simulation optimization model with @RISK, and use RISKOptimizer to find out the best stock level in the range of 95 to 155 subject to the condition that the standard deviation of monthly profit is no more than $1,200. Turn in the output Optimization Summary.
|
How is the number line model used to divide whole numbers
: How is the number line model used to divide whole numbers in the problem?
|
|
Problem regarding the national opinion-polling
: Ask more people. Just before a presidential election, a national opinion-polling firm increases the size of its weekly sample from the usual 1500 people to 4000 people. Why do you think the firm does this?
|
|
How do you square root an odd number using mental math
: How do you square root an odd number using mental math?
|
|
Visiting the actual gravestones
: Historians plan to use these records to learn about African Americans in Coles County's history. They first choose an SRS of 395 records to check their accuracy by visiting the actual gravestones.
|
|
Create a simulation model with excel tools only
: Create a simulation model with Excel tools only, for example, using VLOOKUP,Data Table, but no @RISK, calculate expected profit based on simulation with 1,000 samples, and find out the best stock level.
|
|
How does calculus relate to business in the real world
: How does calculus relate to business in the real world?
|
|
What is the percentage of the misstatement
: What is the percentage of the misstatement in (a) to the reported income of $1,106 million? Round to the one decimal place.
|
|
Sampling method biased
: 1. Is this sampling method biased, and, if so, what is the likely direction of bias?
|
|
Problem regarding the sampling method
: Problem: Sampling on campus. You see a woman student standing in front of the student center, now and then stopping other students to ask them questions. She says that she is collecting student opinions for a class assignment.
|