Sam's Hardware Store Has an Order Policy of Ordering 12

question 92

Essay

Sam's hardware store has an order policy of ordering 12 liters of a specific primer whenever 7 liters are on hand (unless there's already an ordered delivery due). The store would like to see how well their policy works. Assume that beginning inventory in period 1 is 15 units, that orders are placed at the end of the week to be received one week later. (In other words, if an order is placed at the end of week one, it is available at the beginning of week 3.) Assume that if inventory is not on hand, it will result in a lost sale. The weekly demand distribution obtained from past sales is found in the table below. Also, use the random numbers that are provided and simulate 5 weeks worth of sales. How many sales are lost?
$$\begin{array} { | c | c | } \hline \text { Weekly sales } & \text { Probability } \\\hline 3 & .20 \\\hline 4 & .30 \\\hline 5 & .30 \\\hline 6 & .20 \\\hline\end{array}$$ Random numbers for sales: 37, 60, 79, 21, 85

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Definitions:

Commission

A fee or percentage allowed to a salesperson or agent for services rendered, often a percentage of the sale made.

Payment Method

A way of completing a financial transaction, such as cash, credit card, digital wallet, or bank transfer.

Punishment

Punishment involves the application of an undesirable consequence to reduce an unwanted behavior.

Conditioned Reinforcer

A stimulus that has acquired the capacity to reinforce behaviors through its association with a primary reinforcer.