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10SimHw9

# 10SimHw9 - IEOR 4404 Simulation Prof Mariana...

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IEOR 4404 Assignment #9 Simulation March 31, 2010 Prof. Mariana Olvera-Cravioto Page 1 of 2 Assignment #9 – due April 9th, 2010 1. For the system in Problem 5 from Assignment #8, make one replication of length 200 days and let M i be as previously defined. Use the M i ’s and the method of batch means to construct a point estimate and a 90 percent confidence interval for ν = 240 based on n = 10 batches and also on n = 5 batches. 2. A company that sells a single product would like to decide how many items it should have in inventory for each of the next n months ( n is a fixed input parameter). The times between demands are iid exponential random variables with a mean of 0.1 month. The sizes of the demands, D , are iid random variables (independent of when the demands occur), with i 1 2 3 4 P ( D = i ) 1/6 1/3 1/3 1/6 At the beginning of each month the company reviews the inventory level and decides how many items to order from its supplier. If the company orders Y items, it incurs a cost of K + cY , where K is the setup cost and c is the incremental cost per item ordered. When

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10SimHw9 - IEOR 4404 Simulation Prof Mariana...

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