After things have finally calmed down in the kingdom of Arendelle, Kristoff and Sven (realizing they can't compete with Elsa in the "ice business") are getting ready to kick off their next big venture: a shave ice stand. Kristoff and Sven will be busy acquiring both the wild berries for flavor (from the surrounding forests) and the ice (from Elsa); and Olaf will run the kiosk where the wild-berry-flavored shave ice will be sold to the public. Kristoff is trying to figure out how much ice to get from Elsa and how much to charge for the shave ice. He has the following information available to him:

Demand follows a rounded rectified normal distribution:

	A	B
1	price decision:	$1.68
2	quantity decision:	100
3
4	Random Column	Simulated Demand Column
5	=RAND()	=ROUND(MAX(0,NORM.INV(A5,500-150*$B$1,10)),0)

Demand(price) = ROUND(MAX{500-150*price+E,0})

E follows a normal distribution with a mean of zero and a standard deviation of 10.

Any ice left over at the end of the day melts and has to be cleaned up before shop can open the next day. Olaf pays the local youth $1.25 for each pound of melted ice they have to clean up.

Elsa can provide at most 100 pounds of ice per day. Too much moisture removed from the atmosphere (the only way to get ice safe for human consumption) causes climate change.

Each unit of shave ice requires 0.4 pounds of ice..

Excel the problem and answer the next question using your spreadsheet.

For a price of $1.68 and a quantity of ice (from Elsa) of 100 pounds, what is the expected (i.e., average simulated) daily demand?

Answer rating: 100% (QA)

Heres the excel solution to the problem Price Quantity Random Simu... View the full answer