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IEOR 4404
Assignment #8
Simulation
November 11, 2008
Prof. Mariana OlveraCravioto
Page 1 of 2
Assignment #8
– due November 18th, 2008
1. Suppose that
Y
1
,Y
2
,...
is an output process with steadystate mean
ν
and that
Y
(
n
) is the
usual sample mean based on
n
observations. Consider plotting
Y
(
n
) as a function of
n
and
let
l
0
be the point beyond which
Y
(
m
) does not change appreciably. Is
l
0
a good warmup
period in the sense that
E
[
Y
i
]
≈
ν
for
i > l
0
and also that
l
0
is not excessively large? Why?
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
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 Spring '08
 MarianaOlveraCravioto

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