Question: Please solve this using Analytic Solver add-in in Excel, showing the formulas used (i.e. @PsiPoinsson(3)) The owner of a golf shop in Myrtle Beach, SC
Please solve this using Analytic Solver add-in in Excel, showing the formulas used (i.e. @PsiPoinsson(3))
The owner of a golf shop in Myrtle Beach, SC must decide how many sets of beginner golf clubs to order for the coming tourist season.
Demand for golf clubs is random but follows a Poisson distribution with the average demand rates indicated in the following table for each month.
The expected selling price of the clubs is also shown for each month.
| May | June | July | August | September | October | |
| Mean | 60 | 90 | 70 | 50 | 30 | 40 |
| Selling Price | $145 | $140 | $130 | $110 | $80 | $60 |
In May, each set of clubs can be ordered at a cost of $75. This price is expected to drop 5% a month during the remainder of the season.
Each month, the owner of the shop also gives away a free set of clubs to anyone who makes a hole-in-one from a short practice tee next to the shop.
The number of people making a hole-in-one on this tee each month follows a Poisson distribution with a mean of 3.
Any sets of clubs left over at the end of October are sold for $45 per set.
- How many sets of clubs should the shop owner order if he wants to maximize the expected profit on this product?
- What are the best-case and worst-case outcomes the owner may face on this product if he implements your suggestion?
Note: Don't run more than 10 simulation trials. That is a field in the Analytic Solver --Platform section
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