Market the products using one of two competing processes

Reference no: EM131159390

Your company markets 20 different products. You may choose to market the products using one of two competing processes. In Process I (make to stock) you stock 5 items of each of the 20 for a total inventory level of 100 units. In Process II (assemble to order), you assemble the items from a stock of 80 basic components providing the unique flavor to each product after the order has been received. The assembly of the units takes almost no time at all. Demand occurs for the products each day. The demand is always between 1 and 6 items per day, with each outcome having an equal probability of occurring. The inventory stock is refilled at the end of each day. Which process do you think will provide the best fill rate? (The fill rate is the percentage of demand that is met that day) Why? To answer these questions, and to help you decide between the two alternatives, simulate each inventory system for 50 days. Which process provides the highest fill rate? An easy way to conduct the analysis is to simulate the performance of the two processes for one day and then replicate the simulation 50 times. A graphical illustration (e.g., line chart) of the order fill rate comparing the two processes over time would help your analysis.

Note: Please show all formulas and steps used for any calculation cells

Reference no: EM131159390

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