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Problem: Maximum Inventory Level M 11 Units Review Period N 5 Days

The document describes a simulation to estimate the average ending inventory level and number of days with a shortage over a 5 day period. Daily demand is randomly generated based on probabilities in Table 1. Lead times from orders are randomly generated based on probabilities in Table 2. The simulation starts with an inventory of 3 units and an order of 8 units scheduled to arrive based on the randomly generated 2 day lead time. It runs the simulation over 5 cycles to estimate the overall average ending inventory level, shortage quantity, and number of days until shortage.

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174 views8 pages

Problem: Maximum Inventory Level M 11 Units Review Period N 5 Days

The document describes a simulation to estimate the average ending inventory level and number of days with a shortage over a 5 day period. Daily demand is randomly generated based on probabilities in Table 1. Lead times from orders are randomly generated based on probabilities in Table 2. The simulation starts with an inventory of 3 units and an order of 8 units scheduled to arrive based on the randomly generated 2 day lead time. It runs the simulation over 5 cycles to estimate the overall average ending inventory level, shortage quantity, and number of days until shortage.

Uploaded by

ShecaReyes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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>PROBLEM

Suppose that the maximum inventory level M=11 units and the review
is to estimate by simulation the average ending units and the number

> Random Digit Assignment for Daily Demand


Table 1
Demand Probability

0 0.1
1 0.25
2 0.35
3 0.21
4 0.09

*Lead time is a random variable as shown in Table 2


*The distribution of units demanded of units demanded per day is shown in Table 1.
*Assument he orders are placed at the close of business and are received for inventory
*Estimate, by simulation, the average ending units in inventory and the number of days
*Simulate 5 days only.

*Simulation will start with inventory level of 3 units and an order of 8 units schedul
=11 units and the review period N=5 days. The problem
ding units and the number of days a shortage will occur.

>Random Digit Assignments for Lead Time


Table 2
Lead time Probability
(days)
1 0.6
2 0.3
3 0.1

is shown in Table 1.
re received for inventory at the beginning of business as determined by lead time.
ry and the number of days when a shortage condition occurs.

order of 8 units scheduled to arrive in 2 days' lead time.


ned by lead time.
SIMULATION

Beginning Rand.# Daily


Cycle Day Inventory (Daily Demand) Demand

1 3 17 1
2 2 4 0
1 3 10 25 1
4 9 56 2
5 7 86 3
Total 7
Average 1.75
1 11 41 2
2 9 9 0
2 3 9 38 2
4 7 43 2
5 5 54 2
Total 8
Average 2
1 11 93 4
2 7 12 1
3 3 6 32 1
4 5 23 1
5 4 22 1
Total 8
Average 2
1 3 20 1
2 10 91 3
4 3 7 96 4
4 3 100 4
5 0 89 3
Total 15
Average 3.75
1 0 71 3
2 11 2 0
5 3 11 76 3
4 8 25 1
5 7 1 0
Total 7
Average 1.75
OVER-ALL Average:
Ending Units 6.35
Shortage 0.35
no. of days until shortage occurs 0.12
Rand.#
Ending Shortage Order Lead
(Lead
Inventory Quantity Quantity time
time)
2 0 8 - 2
2 0 - -
9 0 - -
7 0 - -
4 0 7 6 1
24 0
6 0
9 0 - -
9 0 - -
7 0 - -
5 0 - -
3 0 8 5 1
33 0
8.25 0
7 0 - -
6 0 - -
5 0 - -
4 0 - -
3 0 8 8 2
25 0
6.25 0
2 0 - -
7 0 - -
3 0 - -
0 1 - -
0 3 11 2 1
12 4
3 1
0 3 - -
11 0 - -
8 0 - -
7 0 - -
7 0 4 1 1
33 3
8.25 0.75
units
units
days
Days until
Orders arrive

1
0
-
-
0

-
-

-
0

-
-
-
-
1

0
-
-
-
0

-
-
-
-
0

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