Simulated period to theoretical average lead time

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Reference no: EM132241330

Average daily sales of muffins in Michael’s store is 8 units. The actual number of sales each day is either 7, 8, or 9, with probabilities 0.3, 0.4, or 0.3, respectively. The lead time for delivery averages 4 days, although the time may be 3, 4, or 5 days, with probabilities of .2, .6, and .2. Michael plans to place an order when the inventory level drops to 32 units (based on the average demand and average lead time). Michael orders 50 muffins at a time. The following random numbers have been generated:

Set 1: 60, 87

Set 2: 52, 78, 13, 06, 99, 98, 80, 09, 67, 89, 45, 54, 81, 79

Use set 1 to generate lead times and set 2 to simulate daily demand. Simulate two weeks and determine how often the shop runs out of stock before an order arrives. Assume beginning inventory of 50 muffins.

Use the simulation to calculate the following: compare average demand during simulated period to theoretical averaged demand. Compare average lead time during the simulated period to theoretical average lead time. Calculate average ending inventory and average number of lost sales.

Reference no: EM132241330

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