The Demand for Refrigerators at an Appliance Store Adheres to the Following

question 14

Essay

The demand for refrigerators at an appliance store adheres to the following probability distribution:
The store orders 4 refrigerators per day to have in stock to meet demand.They are trying to maintain low inventory levels.The holding cost is $5/unit/day.The ordering cost is $20 per order.The lost sale cost is $10/unit.A simulation is to be developed to estimate the average daily inventory cost over 5 days.The table below shows the random numbers to be used for refrigerator demand and lead time on orders:
Assuming that beginning inventory is equal to 5 with no prior orders in transit, what is the overall average daily cost of inventory for the 5 days?

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Definitions:

Control Accounts

An account in the general ledger that summarizes and aggregates the details of a subsidiary ledger.

Subsidiary Ledger

A detailed ledger that provides a breakdown of individual accounts receivable, accounts payable, or other account categories that together constitute a general ledger account.

General Ledger

A comprehensive ledger containing every financial transaction throughout a company's existence.

Special Journal

A ledger used in accounting to record and categorize similar types of transactions for efficiency.