Consider a

company that manages two electronics stores that sell the same popular handheld computer.

Orders are placed to a regional warehouse, also owned by this company. The regional

warehouse places orders to the manufacturer $($which is not owned by the company$).$ The

amount of time to receive an order at either store can be approximated by a normal

distribution with a mean of $1$ day and a standard deviation of $0\mathrm{.}1$ days. The amount of time to

receive an order at the warehouse can be approximated by a normal distribution, with a mean

of $4$ days and a standard deviation of $0\mathrm{.}2$ days. The mean demand for this computer at each

store is five computers per day $($both stores are open $10$ hours per day, $7$ days per week$).$ The

demand is expected to remain the same at both stores for the next $60$ days. Management

wants to use a reorder point scheme at the stores and the warehouse. Their goal is to achieve

at least a $95\%$ service level at each store at minimum cost. The ordering costs are $$75$ every

time a store places an order to the warehouse and $$150$ every time the warehouse places an

order to the factory. It also costs $$0\mathrm{.}50$ per day for every computer in inventory at a store,

and $$0\mathrm{.}10$ per day for every computer in inventory at the warehouse. We assume it also costs

$$0\mathrm{.}10$ per day for every computer in transit from the warehouse to a store. An examination of

the sales records shows that the time between purchases of a computer is $2$ hours on average

$($with an exponential distribution$).$

Let time units in SimQuick represent hours. Thus, the delivery time to the stores from the

warehouse is modeled by Nor$(10,1).$ Hint: Be careful to convert the delivery time to the

warehouse from the factory into hours as well.

Finally, let$$s consider how to calculate the cost of inventory in transit from the warehouse to the

store. To begin, we calculate the mean inventory in transit to Store $1$:

Mean in$-$transit inventory to Store $1=$ Overall mean of $$fraction of time working$$ at Delivery to

Store $1*$ Order size to Store $1$

Likewise, perform this calculation respective to Store $2.$ We now get the following

approximation:

Total cost of in$-$transit inventory $($during the simulation$)=[$Mean in$-$transit inventory to Store $1+$

Mean in$-$transit inventory to Store $2]*(0\mathrm{.}50$ per computer per day$)*(60$ days$)$

Note that $60$ days is the number of simulated days. Since we are letting the time units in

SimQuick represent hours, then each replication should be set at $600$ time units $(600=60$days $*$

$10$ hrs$/$day$).$

a$.$ Build Model $(28$ points$).$ Build a SimQuick simulation for this multilevel supply chain and

provide screen shots from the Model view of your assumptions used for Simulation controls,

Exits, Work Stations, Buffers, etc.

b$.$ Run Experiments$/$Analyze $(48$ points$).$ For each scenario $($row$)$ in the following table, run

$40$ simulations and report the mean of the overall mean service levels for the two stores and

the estimated total cost. Based on the overall mean service levels, which scenario should

management adopt? Explain.

Scenario Warehouse

Order Size

Warehouse

ROP

Store

Order Size

Store

ROP

$1100504010$

$2100504510$

$3100505010$

$4200504010$

$5200504510$

$6200505010$