Athens Gas Station has figured out the weekly demand distribution for their gas
sales. Each gallon of gas sold at the pump results in a profit of 10 cents/gallon
and any lost sales results in a cost of 15 cents/gallon. The gas station at present
has 2000 gallons in storage. The storage capacity is 5500 gallons. Any excess
gas above the storage capacity is shipped back to the distributor at a cost of $2
cents/gallon. Simulate the demand for 40 weeks.
a) What is the average weekly demand, sales, shortage and ship back quantities? What are the
corresponding average weekly costs and profits?
b) Vary the order quantity to figure out the one that results in highest average weekly profit. Plot a chart
of order quantity and profit to make your point.
Every home football game for the past 8 years at Southwestern University has been sold
out. The revenues from ticket sales are significant, but the sale of food, beverages, and
souvenirs has contributed greatly to the overall profitability of the football program. One
particular souvenir is the football program for each game. The number of programs sold at
each game is described by the probability distribution given in the table. Each program
costs $.80 to produce and sells for $2.00. Any pro-grams that are not sold are recycled and
do not produce any revenue.
a) Simulate the sales of programs at 25 football games.
b) If the university decided to print 2,500/2600 programs for each game, what would the average profits
be for the 25 games that were simulated?
Demand Probability
2000 0.12
3000 0.23
4000 0.48
5000 0.17
Sale Prob
2300 0.15
2400 0.22
2500 0.24
2600 0.21
2700 0.18

Answer rating: 100% (QA)

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