QUESTION 3The demand for SMART TVs at Makro adheres to the following probability distribution:LeadDemand per day10.10 0.251 2 32344Time4Probability0.30.20.10.050.60 0.25 0.1 0.05In order to meet the demands, the store orders 12 TVs whenever the stock level is at 3units. Management is trying to maintain low inventory levels. The holding cost isR75/unit/day; the ordering cost is R200 per order. The lost sale cost is R100/unit/day andcurrently, there are 4 units in stock.1. Simulate a 12-day inventory management scenario, assuming that there is anoutstanding order of 6 units that will arrive on day one. NB: show all the steps!2. Make a brief analysis of the simulation results.3. What is the daily inventory management cost?

Given a) 12 days simulation:- Formulas:-

Answered: 1. Simulate a 12-day inventory…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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1. Simulate a 12-day inventory management scenario, assuming that there is an outstanding order of 6 units that will arrive on day one. NB: show all the steps! 2. Make a brief analysis of the simulation results. 3. What is the daily inventory management cost?