>PROBLEM

Suppose that the maximum inventory level M=11 units and the review
is to estimate by simulation the average ending units and the number

> Random Digit Assignment for Daily Demand

Table 1
Demand Probability

0 0.1
1 0.25
2 0.35
3 0.21
4 0.09

*Lead time is a random variable as shown in Table 2

*The distribution of units demanded of units demanded per day is shown in Table 1.
*Assument he orders are placed at the close of business and are received for inventory
*Estimate, by simulation, the average ending units in inventory and the number of days
*Simulate 5 days only.

*Simulation will start with inventory level of 3 units and an order of 8 units schedul
 =11 units and the review period N=5 days. The problem
ding units and the number of days a shortage will occur.

>Random Digit Assignments for Lead Time

Table 2
Lead time Probability
(days)
1 0.6
2 0.3
3 0.1

is shown in Table 1.
re received for inventory at the beginning of business as determined by lead time.
ry and the number of days when a shortage condition occurs.

order of 8 units scheduled to arrive in 2 days' lead time.

ned by lead time.
SIMULATION

Beginning Rand.# Daily

Cycle Day Inventory (Daily Demand) Demand

1 3 17 1
2 2 4 0
1 3 10 25 1
4 9 56 2
5 7 86 3
Total 7
Average 1.75
1 11 41 2
2 9 9 0
2 3 9 38 2
4 7 43 2
5 5 54 2
Total 8
Average 2
1 11 93 4
2 7 12 1
3 3 6 32 1
4 5 23 1
5 4 22 1
Total 8
Average 2
1 3 20 1
2 10 91 3
4 3 7 96 4
4 3 100 4
5 0 89 3
Total 15
Average 3.75
1 0 71 3
2 11 2 0
5 3 11 76 3
4 8 25 1
5 7 1 0
Total 7
Average 1.75
OVER-ALL Average:
Ending Units 6.35
Shortage 0.35
no. of days until shortage occurs 0.12
 Rand.#
Ending Shortage Order Lead
(Lead
Inventory Quantity Quantity time
time)
2 0 8 - 2
2 0 - -
9 0 - -
7 0 - -
4 0 7 6 1
24 0
6 0
9 0 - -
9 0 - -
7 0 - -
5 0 - -
3 0 8 5 1
33 0
8.25 0
7 0 - -
6 0 - -
5 0 - -
4 0 - -
3 0 8 8 2
25 0
6.25 0
2 0 - -
7 0 - -
3 0 - -
0 1 - -
0 3 11 2 1
12 4
3 1
0 3 - -
11 0 - -
8 0 - -
7 0 - -
7 0 4 1 1
33 3
8.25 0.75
units
units
days
 Days until
Orders arrive

1
0
-
-
0

-
-

-
0

-
-
-
-
1

0
-
-
-
0

-
-
-
-
0