QUESTION 5 [47 MARKS] a) Simulation models are mathematical models used for replicating real-world problems to assist in decision making. Discuss the various decisions that can be solved with simulation. (14) b) SA Distributors (SAD) distributes various products. However, SAD is particularly concerned with the inventory and transport cost of the widget. Each widget costs R75 and is sold for R125. SAD wants to minimize total costs (inventory carrying, stockout and transport costs) associated with the widget. The logistics manager was tasked to find the best inventory policy based on monthly demand and decided to investigate the following inventory policy: LOGISTICS MANAGEMENT SYSTEMS A EXAMINATION 2018 5 Inventory policy SAD receives monthly deliveries (80 units) from its supplier at the beginning of each month (starting from the second month). Inventory carrying cost is R15 per widget and a cost of R30 for a stockout is assigned. Starting stock =100 widgets. The following demand information is supplied: The supplier normally charges a transport rate of R5/gadget. Use this information for five weeks to calculate the average weekly profit. (25) c) In your opinion what are the major disadvantages of simulation? (8)