Average Daily Sales of a Product Are 8 Units

question 76

Essay

Average daily sales of a product are 8 units.The actual number of sales each day is either 7, 8, or 9, with probabilities 0.3, 0.4, and 0.3, respectively.The lead time for delivery of this averages 4 days, although the time may be 3, 4, or 5 days, with probabilities 0.2, 0.6, and 0.2.The company plans to place an order when the inventory level drops to 32 units (based on the average demand and average lead time).The following random numbers have been generated: 60, 87, 46, 63 (set 1)and 52, 78, 13, 06, 99, 98, 80, 09, 67, 89, 45 (set 2).Use set 1 of these to generate lead times and use set 2 to simulate daily demand.Simulate 2 ordering periods with this and determine how often the company runs out of stock before the shipment arrives.Assume 32 units on-hand and an order was just placed.

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Definitions:

Hierarchy

A system or organization in which people or groups are ranked one above the other according to status or authority.

Multinational Corporations

Companies that operate in multiple countries beyond their home country, managing production or delivering services in various nations.

Duplication of Tasks

Duplication of tasks refers to the scenario where the same work is being performed by multiple individuals or groups, often leading to inefficiency and waste of resources.