A Warehouse Manager Needs to Simulate the Demand Placed on a Product

question 69

Essay

A warehouse manager needs to simulate the demand placed on a product that does not fit standard models.The concept being measured is "demand during lead time," where both lead time and daily demand are variable.The historical record for this product suggests the following probability distribution.Convert this distribution into random number intervals.

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Definitions:

Contribution Margin

The selling price per unit, minus the variable cost per unit, indicating how much a product contributes towards covering fixed costs and generating profit.

Simulation Analysis

A process of modeling a real-world system or process through a computer program to study its behavior under various conditions.

Scenario Analysis

The process of examining and evaluating possible events or scenarios that could affect the outcome of a decision or investment.

Operating Cash Flow

Cash generated by a company’s normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.