Conduct manual simulation to compare average daily profit

Reference no: EM132201012

Question: Daily demand pattern and (probability of occurance):

Newspapers demanded: 100 (10%); 120 (20%); 140 (30%); 160 (20%); 180 (15%); 200 (5%).

The newsstand buys newspapers in 20-paper bundles at a cost of $4 per bundle and charges its customers $0.50 per paper. Any leftover newspapers per day can be sold fro scrap for $1 per bundle. The newstand wants to compare two rules for ordering newspapers: (1) order the quantity demanded today for tomorrow's sales. (Today's demand was 7 bundles.) (2) order a constant 7 bundles per day. Use Monte Carlo to conduct a 7-day manual simulation to compare the average daily profit for the two decision rules. (These seven uniformly distributed random numbers are given: 66, 42, 17, 18, 76, 49 and 37.)

Reference no: EM132201012

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