This question requires two manual simulations using random numbers. You are required to simulate demand and order lead times ot determine if the operation stocks out before the next order arrives.
Average daily sales of the product are 8 units however, the actual number of sales each day si either ,7 ,8 or 9, with probabilities 0.3, 0.4, and 0.3, respectively.
The lead time for delivery averages 4days, although the time may be 3, 4, or 5days, with probabilities 0.2, 0.6, and 0.2.
The company uses a reorder point of 32 units for this product. (based on the average demand and average lead time).
The following random numbers have been generated: 60, 87, 46, 63 (set 1) and 52, 78,
13, 06, 99, 98, 80, 09, 67, 89, 45 (set 2). Use set 1ot generate lead times and use set 2ot simulate daily demand.
Use the random numbers ot simulate 2 independent ordering periods and determine for each if the company runs out of stock before the next shipment arrives and fi so, when? Assume 32 units on-hand (an order just arrived) for both simulations and that an order
was just placed for both ordering periods simulated. (Do not repeat the random numbers when going from order 1to order 2, for order two use the next random numbers from the