Reference no: EM132172698

A firm operates a docking facility for container ships in Singapore. At present, the facility consists of 2 identical docks and ships arrive during the night to be unloaded. The number of ships that arrive during a single night varies from night to night, as given in the Custom distribution below. Each dock can unload one ship during the following day; if more ships arrive than there are docks available, the ships must wait offshore until the next day (or more) when a dock is free for unloading. The cost of delaying a ship (called a demurrage charge) is $10,000 per day/per ship. Nightly Arrivals Frequency 0 0.30 1 0.30 2 0.20 3 0.10 4 0.05 5 0.05 Build a simulation model for this problem to track the monthly demurrage charges incurred. Build the model to handle 30 days (hints: you need to specifically track each day; you will need to create a cell for the number of docks and reference this cell in your formulas, ensuring that you are able to perform the analysis in Part b; you will need to use some logic/comparison functions in your model – use the Excel Insert Function for help if you cannot create these functions on your own). Assume that we are starting Day 1 of the new month with a backlog of 1 ship remaining from the last day of the previous month, plus any new ships (if any) that arrive during the night will be waiting to be unloaded on the morning of Day 1 are those. a. Show the probability that the Total Demurrage Charge is less than the mean value found in your simulation, and include the statistics as well. Copy and paste your chart to your spreadsheet.

b. The firm is considering adding up to two additional docks. Define a Decision in Crystal Ball for the cell containing the number of docks with a range of 2 to 4 (Discrete, steps of 1.00). Create a Decision Table for the Total Demurrage Cost Forecast with 3 Test Values (and 1,000 trials for each). Copy and paste the table over to your Problem 2 worksheet in your HW2 workbook (do not keep/create a second workbook to submit). i. Assume that each new dock would cost $150,000 per month to operate (including amortized construction costs). Based on the results of your Report in Part b, what would you recommend and why? (It might be helpful to make a calculation using the results to help you answer this question.)