Course: Operations Research 2 Topic: Simulation 1. Kenneth's Auto Tire sells all types of tires, but a popular radial tire accounts for a large portion of Kenneth's overall sales. Recognizing that inventory costs can be quite high with this product, Harry wishes to determine a policy for managing this inventory. To see what the demand would look like over a while, he wishes to simulate the daily demand for several days. Using the table of random numbers, choose 20 samples starting from 151 and in the first row. 2. Dumoor Appliance Center sells and services several brands of major appliances. Past sales for a particular model of the refrigerator have resulted in the following probability distribution for demand: The lead time, in weeks, is described by the following distribution: Based on cost considerations and storage space, the company has decided to order 10 of these each time an order is placed. The holding cost is $1 per week for each unit that is left in inventory at the end of the week. The stockout cost has been set at $40 per stockout. The company has decided to place an order whenever only two refrigerators are left at the end of the week. Simulate 20 weeks of operation for Dumoor Appliance, assuming there are currently 5 units in inventory. Determine what the weekly stockout cost and weekly holding cost would be for the problem. Use the line 151 to 1701st row for the demand and 2nd row for the lead time. 3. Why might a manager be forced to use simulation instead of an analytical model in dealing with a problem of (a) inventory ordering policy? (b) ships docking in a port to unload? (c) bank teller service windows? (d) the U.S. economy? 4. What types of management problems can be solved more easily by quantitative analysis techniques other than simulation? 5. Do you think the application of simulation will increase enormously in the next ten years? Why or why not