Exhibit 12.5 The Following Questions Use the Information Below

question 37

Essay

Exhibit 12.5
The following questions use the information below.
The owner of Sal's Italian Restaurant wants to study the growth of his business using simulation. He is interested in simulating the number of customers and the amount ordered by customers each month. He currently serves 1000 customers per month and feels this can vary uniformly between a decrease of as much as 5% and an increase of up to 9%. The bill for each customer is a normally distributed random variable with a mean of $20 and a standard deviation of $5. The average order has been increasing steadily over the years and the owner expects the mean order will increase by 2% per month. You have created the following spreadsheet to simulate the problem.
-A machine produces an average of 500 parts per day with a standard deviation of 10 parts. This is a normally distributed variable. The percent of defective parts ranges from 8-12%. Parts which need minor repair comprise 75% of the defective parts and cost $5 to repair. The rest of the defective parts cost $20 to repair. What formulas should go in cells B8:B15 to compute the daily cost of defective parts? Instructions: Answer the following questions using the Analytic Solver Platform Excel add-in.

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Definitions:

Sources Of Power

The origins or bases from which an individual, group, or organization derives the ability to influence others.

Referent Power

A form of personal power arising from the attraction others feel towards an individual or the desire to be like that individual.

Legitimate Power

The authority a person or position holds within an organization, recognized as rightful by its members, which allows them to influence others.

Managerial Authority

The power vested in managers to make decisions and direct subordinates within an organization.