SUBJECT: SYSTEMS AND QUALITY CONTROL

PLEASE SOLVE ASAP WITH STEPS

Sahara Logistics are new to the industry in the Dubai and involved in leasing their tankers to customers within the Oil & Gas supply chain. They seek to understand their viability in the industry in terms of its long-term economic sustainability. Consequently, the company wants to simulate potential profitability in their first year of operations. The cost and benefit scenario of the company are detailed below: 0.0 0.42 They envisage that demand for their tankers to move bulk oil would follow a uniform distribution of between 800 and 1000 tankers per year. Servicing cost of the tankers can be modelled using a normal distribution with a mean of $5500 and a standard deviation of $250 per tanker per Vage Cent per per unit of Tanker per year) year Because tanker drivers have different levels of experience, 0.25 their wages would differ From industry insight, they believe this would range from $24,000 to 40,000 per unit of tanker per year. This follows a discrete probability distribution as presented in the chart. 0.40 0. 020 0.11 0.12 0.10 0.04 0.00 140,000 $20,000 139,000 136.000 $10.000 . All other cost is expected to be at a total fixed rate of $1,500,000 per year. The company believe they can be paid a flat fee of $40,000 for each tanker per year given that the industry is very matured, and this information is relatively known Given the above information: a. Construct a simulation model with 1000 trial to estimate the potential profit of Sahara Logistics. b. Estimate the basic statistical parameters of the model output. c. Graphically plot the model output and comment on it. d. Management would be happy so long as they at least break even. Use simulation to estimate the probability of this scenario