Bristol Bikes, Inc. wants to develop an order-quantity and reorder-point policy that would minimize the total costs associated with its inventory of exercise bikes. The relative frequency distribution for retail demand on a weekly basis follows:

The relative frequency distribution for lead time follows:

The inventory-holding costs are $1 per unit per week, the ordering cost is $20 per order, the shortage cost is $25 per unit, and the beginning inventory is 7 units. Using an order quantity of 12 and a reorder point of 5, simulate 10 weeks of operation of this inventory system?

Demand 01 2 34 5 Probability .20 .35 .25 .10 05 05 Lead Time (weeks) 1 234 Relative Frequency 0.10 0.20 0.60 0.10