Industrial chemicals that has six manufacturing facilities

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Reference no: EM131280519

Consider now a producer of industrial chemicals that has six manufacturing facilities S1, S2, …, S6, from which it ships its products to six regions in the country with respective demands D1, D2, …, D6. The supply-demand setting appears to be quite balanced: the capacity of each plant is 100 units/day, and the demand at each of the six regions is on average 100 units/day. More precisely, assume that the demand in each of the regions follows a normal distribution with mean 100 units/day and standard deviation 40 units/day. The company wants to evaluate three shipping configurations: 1) Fully flexible: The demand from any region can be supplied from the supply from any region. 2) Dedicated: The demand for each region is served from the corresponding facility; i.e., S1 serves D1, S2 serves D2, …, S6 serves D6. 3) Short chain: The supply-demand points are fully flexible by pairs, as follows: The company is interested in estimating the total aggregate volume of sales for each of the configurations. a) Using Crystal Ball, simulate the total aggregate volume of sales for each of the three configurations in the same spreadsheet. That is, for a given set of demands, determine what is the total volume of sales under each of the configurations. Do this for 1,000 trials, and report the respective approximate 95% confidence intervals for the true mean values of volume of sales. b) Provide the intuition for the rank of the three configurations with respect to the total volume of sales

Reference no: EM131280519

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