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OrderInventorySimAssignment

# OrderInventorySimAssignment - Monte Carlo Simulation...

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Monte Carlo Simulation Assignment Alejandro S. Gonzalez De La Salle University Graduate School of Business Problem : Average daily sales of a product are 8 units. The actual number of units each day is 7, 8, or 9 with probabilities 0.3, 0.4, and 0.3 respectively. The lead time for delivery of this product averages 4 days, although the time may be 3, 4, or 5 days with probabilities 0.2, 0.6, and 0.2 respectively. The company plans to place an order when the inventory level drops to 32 units (based on average demand and lead-time). The beginning inventory is 32. Solution: In determining the solution to this problem we have initial decision variables which are the Inventory Level where operations should be ordering from the supplier and the number of units in each placed order. In our case it is: Also, the data gathered from the daily sale and the lead time for each order: From these data, we can simulate scenarios that will lead to a possible outcome of our inventory turn- over.

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OrderInventorySimAssignment - Monte Carlo Simulation...

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