An Office Supply Store Wants to Simulate Its Inventory System

question 8

Essay

An office supply store wants to simulate its inventory system for notebooks. The company has collected data on the shipping time and daily demand for notebooks. Each notebook generates a $2 profit. Customers can buy notebooks at any office supply store so there are no backorders (the company loses the sale and profit). The company orders 200 notebooks whenever the inventory position falls below the reorder point of 100 notebooks. Orders are placed at the beginning of the day and delivered at the beginning of the day so the notebooks are available on the arrival day. The average daily demand is 23.5 notebooks. An average service level of 99% is desired. There are currently 25 notebooks on hand and no orders are pending. The following spreadsheets have been developed for this problem. The company has simulated 1 month of operation for its inventory system. (HINT: This covers Rows 8 to 37 of the spreadsheet.) What formulas go in cells A1:J37 of the "Model" worksheet for this simulation?

---

Definitions:

Opportunities

Potential avenues through which an organization or individual can grow, improve, or gain an advantage.

Mental Fixedness

A cognitive bias that limits a person to using an object or idea in only the way it is traditionally used.

Habit-Breaking Strategies

Techniques and methods designed to help individuals quit or modify detrimental habits.

Cognitive Styles

Individual differences in the way people perceive, think, solve problems, learn, and relate to others.