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45. A company’s warehouse can store up to four units ofa good. Each month, an average of 10 orders for thegood are received. The times between the receiptsof successive orders are exponentially distributed.When an item is used to fill an order, a replacementitem is immediately ordered, and it takes an average of one month for a replacement item to arrive. Ifno items are on hand when an order is received, theorder is lost. Use simulation to estimate the fractionof all orders that will be lost due to shortage. (Hint:Let the storage space for each item be a “server” andthink about what it means for a server to be busy.Then decide on an appropriate definition of “servicetime.”)

45. A company’s warehouse can store up to four units ofa good. Each month, an average of 10 orders for thegood are received. The times between the receiptsof successive orders are exponentially distributed.When an item is used to fill an order, a replacementitem is immediately ordered, and it takes an average of one month for a replacement item to arrive. Ifno items are on hand when an order is received, theorder is lost. Use simulation to estimate the fractionof all orders that will be lost due to shortage. (Hint:Let the storage space for each item be a “server” andthink about what it means for a server to be busy.Then decide on an appropriate definition of “servicetime.”)

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 19P
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45. A company’s warehouse can store up to four units ofa good. Each month, an average of 10 orders for thegood are received. The times between the receiptsof successive orders are exponentially distributed.
When an item is used to fill an order, a replacementitem is immediately ordered, and it takes an average of one month for a replacement item to arrive. Ifno items are on hand when an order is received, the
order is lost. Use simulation to estimate the fractionof all orders that will be lost due to shortage. (Hint:Let the storage space for each item be a “server” andthink about what it means for a server to be busy.Then decide on an appropriate definition of “service
time.”)

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