I have solved most of question and the answers I have so far are correct, I...

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General Management

I have solved most of question and the answers I have sofar are correct, I just need help finding out the lower bound andupper bound

(All answers were generated using 1,000 trials and native Excelfunctionality.)

Galaxy Co. distributes wireless routers to Internet serviceproviders. Galaxy procures each router for $75 from its supplierand sells each router for $125. Monthly demand for the router is anormal random variable with a mean of 100 units and a standarddeviation of 20 units. At the beginning of each month, Galaxyorders enough routers from its supplier to bring the inventorylevel up to 100 routers. If the monthly demand is less than 100,Galaxy pays $15 per router that remains in inventory at the end ofthe month. If the monthly demand exceeds 100, Galaxy sells only the100 routers in stock. Galaxy assigns a shortage cost of $30 foreach unit of demand that is unsatisfied to represent aloss-of-goodwill among its customers. Management would like to usea simulation model to analyze this situation.

A) What is the average monthly profit resultingfrom its policy of stocking 100 routers at the beginning of eachmonth? Round your answer to the nearest whole number.$_4246_

B) What is theproportion of months in which demand is completely satisfied?_52_%

C) Use the simulation model to compare theprofitability of monthly replenishment levels of 100, 120, and 140routers. Which monthly replenishment level maximizes profitability?_120_

Use the corresponding 95% confidence intervals on theaverage profit to make your comparison.

Lower Bound: $_________

Upper Bound: $_________

Answer & Explanation Solved by verified expert
4.2 Ratings (855 Votes)

Average monthly profit (without standard deviation) = $ 5000

Average monthly profit (with standard deviation) = $4232.90 ~~ $4233

Proportion of months in which demand is completely satisfied = 51.5%  

Replenishment Levels which maximises profit = 120

Few values i can post :

Random Stimulation Values Profits if met =1 else 0
101.9304002 4942.088 1
66.17494165 2801.371 0
128.2729387 4151.812 1
130.4832516 4085.502 1
78.93913172 3631.044 0
114.5828759 4562.514 1
98.60604275 4909.393 0
127.3621202 4179.136 1
71.95203555 3176.882 0
131.9541071 4041.377 1
69.33289526 3006.638 0
72.6423572 3221.753 0
78.11331636 3577.366 0
87.67720695 4199.018 0
101.8860372 4943.419 1
92.74518023 4528.437 0
142.5275158 3724.175 1
93.6380548 4586.474 0
75.1193247 3382.756 0
75.52589322 3409.183 0
98.71480769 4916.462 0

Its not allwoing me to post all 1000 values because of sze, I can send those values in case needed for you.


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